Cut executive pay to prevent job losses, says HR expert

By Angela Dorizas

Public sector organisations can prevent restructures and job losses through a range of cost cutting measures, including flexible work modes, executive level pay cuts and voluntary redundancies.

That’s the advice of human resources consultant and Chandler Macleod executive general manager David Reynolds.

“Before you embark on a whole cost-cutting exercise you need to look at the ways in which you can actually save costs without necessarily making people redundant,” Reynolds told GovernmentNews.

He said public sector organisations should consider hiring freezes, salary cuts and flexible work arrangements, before taking the axe to jobs.

“There are many smart ways of looking at expenditure cuts without cutting people’s jobs,” Reynolds said.

He said the four day working week was a viable option, but warned that it would have a significant impact on lower paid employees.

“You’ve got to look at the impact that a four day week has on people. It’s 20 per cent of their salary,” Reynolds said.

“The impact on them is going to be much greater than getting all the executive level employees to take up a 10 per cent salary cut – maybe that’s the way to go.

“I certainly think taking salary cuts at the senior executive level is the way to go, because you get significant savings from that without job losses.”

Reynolds said when it comes to the crunch and job cuts are necessary, voluntary redundancies would be preferable, but not without risk.

“The danger of voluntary redundancies is that you could lose some of your best people,” he added.

“You have to make sure that you’ve got a handle on that.”

Reynolds said other cost-cutting measures included reducing travel by taking up teleconferencing, cutting contractors and consultants, and only spending on training and development that was “absolutely necessary”.

“It’s pretty basic, but it all adds up.”

Comment below to have your say on this story.

If you have a news story or tip-off, get in touch at  

Sign up to the Government News newsletter

Leave a comment:

Your email address will not be published. All fields are required