Businesses considering making staff redundant should first consider the full costs of doing so, the Chartered Institute of Personnel and Development has warned.
The organisation's research warns that the average redundancy costs employers £16,375 before they are in a position to start making savings.
The figure is derived from redundancy payouts, the cost of recruiting and training new staff once the economy recovers, and a loss of productivity that comes when staff that survive the cull lose motivation.
"Restructuring is a fact of economic life that can never be ruled out," said John Philpott, chief economist at the CIPD.
"But while making people redundant can seem one of the most straightforward ways of cutting costs, redundancy is itself a significant cost to most organisations with a number of direct and indirect or hidden costs.
"Employers should hold their nerve and focus on retaining talent and investing in the skills of their people," he added.
"It is these people with their commitment, productivity and ability to add value who will ultimately keep individual businesses and the whole of the UK competitive, and put us in a strong position to recover from the downturn quickly."
The CIPD has warned that 600,000 jobs are likely to go this year, with others predicting far greater cuts that would see unemployment rise from its current rate of 1.86m to 3m.
The organisation added that job cuts were likely to continue into 2010, with 1m people expected to lose their jobs between now and then.
The TUC backed the call for employers to use redundancy as a last rather than a first resort and has called on the government to raise statutory redundancy pay to make this a less attractive option.
