Approved – 18 November 2009

Selfless north workers are ‘unsung heroes of recession’

A new survey has found that more than half of north workers have gone the extra mile  during the last year in recognition of the business difficulties caused by the recession.

Research commissioned by R3, the insolvency trade body, has found that significant numbers of employees had worked unpaid extra hours or unpaid overtime, accepted pay freezes or reductions, worked longer hours or making other changes to their work patterns, all of which could help companies in difficulty stay in business and thus preserve jobs.

The survey, carried out across the north east, north west and Yorkshire, found that 55% of respondents said they had made some sort of personal sacrifice at work during 2009, in terms of either time or money.

More than a quarter (28%) of those questioned said they had worked unpaid extra hours or unpaid overtime, with almost one in five (19 per cent) saying they had taken unpaid leave.

A further 13 per cent had accepted a pay freeze, with nine per cent not even asking for a pay rise in view of the economic situation, and ten per cent not receiving a bonus they had been expecting.
An overwhelming majority (91%) of R3’s Insolvency Practitioners members believe these actions can play a useful role in helping a company prevent insolvency, with 42% of them believing that such sacrifices can be the 'magic bullet' to help save a failing business.
Jim James, north east regional chairman of R3 and head of the Insolvency and Corporate Recovery Unit at Newcastle-based law firm Ward Hadaway, says; “Whilst we have seen many hundreds of regional companies either run into trouble or go out of business altogether, without the unselfish actions of these unsung heroes of the recession, that number could have been far higher.

“In some cases with which our members have been involved, such personal sacrifices have made the difference between survival and collapse – a few people taking pay freezes or unpaid leave in the short term can make a big difference to a company’s cashflow, and thus help prevent insolvency and job losses in the longer term. 

“With record numbers of company insolvencies, along with high unemployment rates, the significance of the continuing contribution that these people are making to their companies, their colleagues and the economy as a whole should not be underestimated.”    
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For further information please contact:
Julian Christopher, Footprint Public Relations, t: 07891 005034 e: julianchristopher@btinternet.com

Will Black, R3 Communications Manager
t: 020 7566 4215  m: 07917 422 485  e: will.black@r3.org.uk

Esme Harwood, R3 Policy officer
t: 020 7566 4220  m: 07887 843518  e: esme.harwood@r3.org.uk

Notes to editors:

  • R3 is the trade body for Insolvency Professionals, and is made up of 97% of the UK’s Insolvency Practitioners from all over the UK. R3 stands for ‘Rescue, Recovery, and Renewal’ and is also known as the Association of Business Recovery Professionals.
  • R3 comments on a wide variety of personal and corporate insolvency issues. Please contact the press office, or see www.r3.org.uk for further information.
  • R3 promotes best practice for professionals working with financially troubled businesses.  Our members work in preventing insolvency and turnaround, as well as formal insolvency procedures.  All R3 members are regulated by one of nine recognised professional bodies.
  • GfK NOP interviewed 1000 adults 16+ in the UK between the 23rd to 25th October 2009.  Data has been weighted to bring it in line with national profiles.  Of those who have been employed in 2009,
    • 28% worked overtime or longer hours without extra pay
    • 15% have accepted a pay freeze
    • 14% have deliberately not asked for a pay rise in view of the recession
    • 14% have taken unpaid leave
    • 10% didn’t receive a bonus that they would otherwise expect to receive
    • 7% took a pay cut
    • 4% have taken voluntary redundancy
    • 53% have done at least one of these things.
  • Between the 15th and 30th July 2009, ComRes conducted an online survey of R3 members in the UK.  The survey was sent to 2082 IPs, of whom 365 responded.  This means that approximately one in six of those eligible to take part did so.  ComRes is a member of the British Polling Council and abides by its rules (www.britishpollingcouncil.org). Full tables can be found at www.comres.co.uk

High profile cases in 2009 include:
According to press reports, the following companies all asked staff to make personal sacrifices to secure the company’s long term future:

Honda: In August, Honda’s Swindon factory announced it was closing down for a four-month break – staff were asked to take a cash payout to leave and those who remained were paid in full for two months and at 60% for the next two months.

British Airways:  British Airways pilots accepted 2.6% pay cuts. In return, they received shares in the company in three years time worth £13m.  Also at BA, 7,000 staff agreed to take part in cost-saving measures, including 800 who said they will work unpaid for up to a month. Most opted for unpaid leave.

BT: BT said they would give staff an upfront sum of 25% of their annual salary in return for taking the entire year off.  Staff were also given the option of a one-off payment of £1,000 for going part-time.

KPMG: asked its staff to move to a four-day week or take sabbaticals of on 30% pay, to stave off a redundancy programme across the firm.

McGrigors: the Scottish law firm which employs 700 people across the UK, asked staff, to take two weeks off without pay between June and the end of its financial year on 30 September.  Salaries across the firm were frozen until October 2010.

Wragges: the law firm has seen more than 20 associates take up sabbaticals and extended maternity leave as the firm attempts to avoid the need for further losses.

Gleneagles, owned by Diageo Plc: sent letters to 700 employees in January asking them to consider voluntary severance, unpaid leave, reduced working hours or early retirement.

Thorntons: offered sabbaticals and shorter working weeks.

Esh Group: Top executives at one of the north east’s largest private businesses have taken a 30% pay cut. 

Leyland: announced 250 job losses and an extended factory shutdown over Christmas 2008 because of a "severe decline" in demand.

According to the CBI, nearly two-thirds of employers are operating some form of recruitment freeze and 45% have introduced more flexible working