Unemployment is rising again and business predictions for 2002 show UK firms still have concerns about their ability to ride out the downturn in the economy.

Many have already made redundancies, particularly in manufacturing, and the trend is expected to continue this year.

Official figures released this week show 3,331 people were claiming benefit in Oxfordshire in December -- up from 3,242 the previous month.

Nationally, the count rose by 3,200 to 963,500 -- 3.2 per cent of the population.

Now employers are being urged to think again before axing staff.

The Industrial Society wants them to look at 'reflective restructuring' as an alternative.

This involves moves to reduce the wage bill without cutting the head count.

The society, which carries out research into the world of work and which has members from companies of every size as well as public sector organisations, charities and trade unions, initiated an exploratory study and found the economic downturn has caused some companies to change their general approach to flexible working.

More are offering training breaks, sabbaticals, job-sharing, reduced hours working and remote working, instead of making redundancies.

Although cutting staff has traditionally been a popular strategy for firms to cut costs, research indicates that it doesn't always boost share prices and performance and, in the longer term, often has the opposite effect.

Continued rounds of job cuts can also add to workplace uncertainty, as well as reducing employee loyalty and trust.

Theo Blackwell, policy specialist at the Industrial Society, said: "It's too early to say whether UK firms are adopting reflective restructuring in great numbers.

"However, it's clear that firms which see employees as assets rather than costs are looking for ways to retain the skills, loyalty, experience and commitment of their people by offering a more reflective approach to restructuring."