The significant economic challenge facing the North Sea oil and gas sector, brought to a head by the fall in the oil price, is taking its toll in human terms.
As is often the case in a tightening market place, a number of companies are making redundancies to cut costs and rationalise their businesses.
Whilst this may be the only option available in the short-term, the long-term effects may be detrimental, particularly when market opportunities pick up again and a new wave of recruitment is required.
Following a redundancy exercise, employers may come up against various challenges including low morale and a ‘survivor mentality’ amongst remaining staff, with consequent reduced productivity, reputational issues, impact on a company’s credit terms and lost skills and expertise.
Alternative measures may achieve the necessary cuts in expenditure, while preserving a company’s longer term viability and marketability.
By Liam Kerr, senior associate at law firm CMS