There is not a day that goes by without further talk of redundancies in the City as the financial markets bear the brunt of the deepening credit crunch.

Certainly it seems that every day is a black day in the City. If it is not the knock-on effects of bailing out Northern Rock and Bear Sterns, then it is job losses at large financial institutions. Such organisations are the first to be hit in an economic downturn, and it remains to be seen if other sectors, including retail and leisure, will follow.

Predictions abound in the Square Mile. The Centre for Economics and Business Research has just revised its October figure of 6,500 redundancies to 10,000, while Experian Business Strategies expects the 350,000-strong City workforce to drop by 20,000 this year. And some market watchers say that this is just the tip of the iceberg.

As for employees, they too are not anticipating a sunny outcome any time soon. Research by pensions and employee benefits consultant Hymans Robertson says between a quarter and a half of UK employees think they will lose their jobs in 2008.

With the financial sector being one of the biggest users of technology, it is not surprising that initial redundancies have moved from front office to back office IT staff. And the economy is not set to turn in an upwards direction any time soon.

A recent report from the Confederation of British Industry and consultant PricewaterhouseCoopers reveals banks will cut IT spending in 2008. Figures from recruitment specialist Giant also indicate tough times, claiming the number of IT contractors going without work for at least 12 weeks has risen to 5.5 per cent for the first time in three years.

Get it right from the start

With the stage set for doom and gloom, IT leaders must remember that employees facing redundancy are set for a very unsettling and upsetting period. We all know of people who have said that redundancy was the best thing that ever happened, enabling them to start a new career, enjoy early retirement or launch their own business.

But initial emotions are often far from gleeful. Before employees can re-set their career priorities, there is the panic and fear that the word redundancy raises. And employers can get their approach very right or very wrong.

Every organisation would surely want to avoid the situations seen in France in the past few months where disgruntled employees have expressed their fear and anger over job cuts in extreme ways.

Take the example of the Unilever-owned ice cream factory in the eastern city of St Dizier, where employees took their manager hostage having been told of 250 job cuts. Or the Michelin tyre factory in north-eastern France, where workers held two human resources managers hostage for three days in response to the company’s plans to close the plant.

In these days of employer branding and a more sympathetic approach to worker well-being, extreme situations should be avoided ­ and IT leaders need to help those affected by redundancy.

In the past, such help often took the form of a “tea and sympathy” approach, with little more on offer than help to update a CV. Responsible employers now offer more, even to the point of actively working with employees facing redundancy to find a new job.

Support that companies can provide includes one-to-one coaching sessions, seminars and workshops, networking advice and opportunities, online job search tools, advice on self-employment, and office facilities from which to carry out their job hunting.

Experience has shown that most people facing redundancy just want another job, unless of course they are retiring or starting their own business. But few people stop to consider the skills they have picked up in their career or through hobbies and other personal activities.

For example, in a coaching session with an IT manager in a financial institute, it was unearthed that the employee enjoyed using his interpersonal skills and in particular his voluntary role as a youth worker. As a result, the employee was able to widen his job search and take his external skills into account when searching for a position.

Investing in the future

Business leaders need to remember that every business has customers, and a disgruntled ex-employee will do their former employer no favours when talking to friends and family.

On the reverse side, an employee who has been helped by their organisation into a new and satisfying job is more likely to refer to their former employer in a positive light.

However, do not think that helping ex-employees is just about winning brownie points with potential customers. Given the IT skills shortage, organisations should also think about helping leavers to stay in the industry and continue to hone their skills.

Treating former workers well also sends the message to existing and potential employees that your firm can be a place to develop a career. Headlines about workers taking the management hostage are not going to achieve that. CB

Beverley White is the chief operating officer of human resources services group Penna