Lesley Garrick: Better to bite bullet with job cutting

Too often seen as polar opposites, in fact there is much that the public sector could learn from the private sector's experience of recessionary times both in the things they have got right and the mistakes that have been made.

Here in Scotland the public sector may argue that it will be proportionately worse-off than counterparts elsewhere in the UK because of its prominence as the country's largest employer. It is an unpalatable truth that some job losses will be necessary and how to deal with this will no doubt tax the skills of many a public sector manager.

However during our recent survey of how the private sector coped during the recession, one stark lesson became apparent. That where job losses are necessary, the best approach is to meet the challenge head-on and make one round of quick, deep cuts.

Most private companies we spoke to agreed that job cuts had a detrimental effect on staff morale and engagement. However, once cuts exceeded five per cent (up to a maximum of 20 per cent), the amount of damage they inflicted on morale was roughly the same, regardless of size.

The argument goes, therefore, that three rounds of six per cent cuts would have three times the impact of one reduction of 20 per cent. Biding your time until all the variables are known isn't an option.

While all cuts can damage staff engagement and motivation, a regular drip feed of bad news does the most harm. If cuts are necessary, there's a serious argument for taking a cool, realistic view of the worst that could happen and cutting once in line with that view.

That doesn't mean that cutting jobs is the only way ahead, though. Private sector employers have been notably resourceful in avoiding redundancies where possible, with many opting instead to introduce pay freezes or temporary reductions, adjustments to terms and conditions, shorter working hours or by offering secondments or sabbaticals.

• Dr Lesley Garrick is associate director of Hay Group