Due to the current economic climate, businesses may be presented with some difficult decisions to make regarding their workforce, including redundancy.
Employers may have to write redundancy letters during economic downturns - when the business is experiencing a reduction in revenue, when restructuring operations or departments due to changes in the market, or when technological advancements mean jobs have become automated or outsourced.
Managing and making staff redundancies across a business is often an unpleasant but necessary task that many employers may have to consider when reducing their headcount. When faced with the prospect of making redundancies, it’s important for employers to manage the process effectively and efficiently to minimise the impact on both the affected employees and the entire business.
Here are some steps employers can take to manage staff redundancies:
Create a redundancy plan
Having a redundancy plan in place will help employers effectively manage every stage of the process, from consultation and planning to notification and evaluation. It’s important to make sure the initial plan includes checks to see if there is a genuine redundancy situation, what the timescales are, and how consultation will take place.
For each stage of the plan, a record needs to be kept, ensuring the entire process is accountable to be delivered efficiently and legally. Redundancy plans should include:
An explanation as to why redundancies are being made
A timetable outlining next steps
The meeting process for all affected employees
The meeting process for all unaffected employees
An outline of the redundancy criteria and selection process
How the announcements will be made
If redundancies are in fact unavoidable, the latter stages of the plan should also include selection, notices and payments.
Be lawful, fair and transparent
Redundancy can be seen as a fair reason for dismissal, but should only be used in certain circumstances where the employee’s role no longer exists and/or is no longer required within the business.
As such, when considering employees for redundancy, employers should use a selection criteria that is fair and objective, which might include an employee’s:
Length of service
Employers must comply with employment laws and regulations when managing redundancies. According to the Equality Act 2010, it’s unlawful to make someone redundant by reason of a protected characteristic. These include age, sex, sexual orientation, marital status, disability, race or religion.
Following the correct legal procedure is imperative, as failure to do so can lead to wrongful dismissal claims. Employers should consult with employees and/or their representatives when making decisions that affect their jobs.
Offer clear communication
As with most situations that concern employees, communication is key when it comes to managing redundancies. Be open and honest with employees about the situation – it always helps to explain the reasons for the redundancy and provide as much information as possible about the process.
This information can be hard to hear, so employers are encouraged to act sensitively to the emotions of those affected and provide support where necessary. For that reason, the process needs to be transparent, and employees should know what to expect throughout.
Alongside the employee, it’s important to remember that redundancies can impact the business in more ways than one – and stakeholders with an interest in the organisation should also receive clear communication. Anyone from customers to suppliers and investors have the right to be informed about any changes, but the focus should be on reassuring them about the future of the business.
Remember, communication is there to help to manage any negative impact on the organisation’s reputation or relationships.
Provide employee support and guidance
Redundancy can be a traumatic experience for any employee. Therefore, providing the necessary support and guidance to help affected workers cope with the news can go a long way, not only in terms of maintaining best practice but for business reputation.
Employers can help employees through:
Finding new employment
Accessing training and reskilling opportunities
CV support and career coaching
Job search advice and recommendations
As redundancy is a last option, it’s worth considering whether there are any suitable alternative roles within the business that impacted employees could be offered.
Anyone who has worked for their employer for at least two years at the time their job ends should be offered an alternative role if one is available, or at least be made aware of any opportunities across the business. This may involve individuals undertaking training or upskilling to take on different roles – but if the offer isn’t taken up, the employee will be deemed as dismissed through redundancy and be entitled to receive statutory redundancy pay.
This payment is there to help employees during the transition period as they look for new employment, and should be calculated correctly and paid in a timely manner.
Consider remaining employees
Redundancies can have a significant impact on remaining employees, who may feel demotivated, stressed, or uncertain about their own job security. As much as the focus may be on creating a supportive environment for those leaving the company, be mindful to keep your existing workforce updated and supported throughout the stressful period.
While those workers may not have faced dismissal, they may have been affected by witnessing the experience of their colleagues, which can negatively impact their morale. This can be harmful to the working environment, business operations and to employee performance.
Continue to learn and adapt
Managing redundancies can be a difficult process, but it can also provide an opportunity for an organisation to learn from the experience and improve upon its practices. Employers should conduct a post-redundancy review to evaluate the situation and identify any areas for improvement so, if it does need to happen again, the business is better prepared.
During the redundancy talks, it may be worth taking any feedback on board from the affected employees. This can be used to make changes to any practice and policy currently in place, and, most importantly, improve the support and guidance provided. Proactive measures can help build resilience and better prepare managers for any future challenges.
Employers should also look at their redundancy process as a whole, making sure line managers are able to confidently deal with these types of situation. According to research by employment law support firm WorkNest, 74% of employers aren’t providing any training to their line managers on how to handle redundancies – indicating the scale of potential emotional damage that could be routinely occurring though no fault of their own.
Staff redundancies can be a challenge, but it’s imperative that the process runs as smoothly as possible. By taking the time to plan, execute and evaluate the task, employers can minimise the impact that redundancies can have on all involved.