Such moves are part of an increasing trend across Europe as companies react to plummeting demand by trying to find innovative solutions that fall short of simply firing people. In looking at possibilities such as pay cuts, leave of absence or job-sharing, companies are hoping to avoid some of the problems from the last downturn when cutting staff too severely led to trouble when a recovery came.
“The smart organisations will be best placed to benefit from the upturn when it eventually comes. Whereas five years ago they might have cut the headcount by 10 per cent now they would do it by 5 per cent and look at some other things,” says Michael Rendell, head of human resource services at PwC.
Manufacturers are in the vanguard of this movement, he says. Already many carmakers including France's Renault and Peugeot have started to pay some workers less in return for fewer hours. Opel, the embattled German arm of General Motors, is considering a similar plan. A study of UK manufacturers found 13 per cent had frozen pay in the three months to the end of October while another 12 per cent had deferred pay rises, according to the EEF trade association.