TO SURVIVE in recessionary times you have to cut costs. Like slimming, the first thing to go is the fat that has been built up during the good times.

Companies take a hard look at their costs to see where savings can be made.

Inevitably, this leads to looking at the workforce and implementing redundancies. But once the redundancy programme has been completed and the sales continue to decline what next, more redundancies?

In theory, you can keep on reducing your workforce to cut your costs, but there comes a stage where employers will be eating into the fabric of their business.

So what are the alternatives to redundancy that companies can consider?

Re-organisation: this is a good time to look at your business and ask yourself whether it is the right business model in the current climate. Can employees be redeployed or retrained and moved to a part of the business where they could be used to good effect? Remember that business idea you had but didn’t have time to implement in the days of the Celtic tiger.

Timebanking: is business quiet at the moment? If so, think about letting employees take time off so that, when work returns, they can pay back the time that they took off, avoiding a claim for overtime.

Timebanking can be adapted and used creatively, it can be used to shut down sections of a business or whole factories that are not busy.

Employees could also take extended holidays all at the same time to save running costs. It may suit some staff to take the summer off with the appropriate pay reductions.

It need not apply simply to industry. It could be applied equally to the financial and business sectors, for example where a deal is delayed or there is a lull over the summer months. Employees can either bank the hours or be paid less.

Pay cuts: many companies are already implementing pay freezes, pay cuts and reduced bonuses.

Job-sharing and part-time working: instead of one of two full-time employees being made redundant, both employees may be willing to move to part-time work so that they both share the remaining work that is still required to be done.

Compressed hours: this is a flexible working arrangement where employees work their total number of contracted weekly hours over a shorter period – eg, in four days rather than five. While workers receive the same pay, savings should be made in reduced overtime and better use of resources. This option may work well with job-sharing arrangements.

Career breaks/Sabbaticals: companies are offering career breaks for a number of years with annual lump sum payments, subject to the individual agreeing not to work in the same industry. Sabbaticals with no or substantially reduced pay are being offered for shorter periods.

Extended holiday: Christmas shutdown periods are being extended. Companies are directing employees to take any annual leave entitlement they have built up. Some companies are considering directing all staff to take one or two weeks’ holidays at the same time – eg, a summer shutdown.

Terminate agency contracts: instead of shedding in-house employees, companies are considering terminating agency workers and independent contractors.

Secondments: moving some employees to a client may reduce costs and also strengthen client relationships.

Invoking mobility clauses: where a company has more than one site, the employment contract may entitle it to require staff to work at another site other than their normal place of work. This offer may work well with job-sharing arrangements.

Boyce Shubotham is head of the employment law unit at William Fry