Member Article

Redundancies are not the only option for Carillion fallout

• An estimated 30,000 businesses part of the Carillion supply chain at risk
• Up to 20,000 jobs could go as building giant collapses
• £953m spent with local businesses in 2016
• 120 day payment terms hampered suppliers

As the sad news of Carillion going into liquidation sinks in, the huge impact is about to be felt on the 30,000 businesses part of the supply chain, many here in the North East.

Monies owed for work completed or expected income for contracts won but yet to start will not materialise and this could have a devastating impact on small businesses.

Carillion has been criticised in the past for their unfair and unreasonable payment terms of 120 days which seriously hamper the links in their supply chain, it was a case of put up or shut up and in the often cashflow tight SME sector these payment terms alone have caused pain and worry.

The building giant employs 20,000 directly and spent £953m with local businesses in 2016. As some suppliers are heading towards a cashflow crisis and the first thought can often be to reduce staff. Our advice is clear, do not panic, redundancies are not the only option.

Some alternatives can include recruitment freezes, pay cuts, redeployments, layoffs or short-time working and benefit freezes. Many employees are often keen to help their employer through the tough times, especially if it can avoid compulsory redundancies.

Jayne Hart, Director of The HR Dept Newcastle advises “Get professional HR advice in as soon as possible, along with your accountant, and together they can put in place a strategy to keep the business afloat and to minimise losses. We are currently hearing some devastating stories across our UK network of HR Depts and heartbreaking decisions business owners are having to make and we want to help”.

Jayne Hart further adds “We saw thousands of companies through the last recession, we know what can be done in difficult times to recover”.

This was posted in Bdaily's Members' News section by Jayne Hart .