Out of Love – Considerations Around Redundancy Actions by André Bozon, Lead Trainer

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“We don’t love you anymore.”  Words that no-one ever wants to hear, yet some will hear it, especially following the issues that the COVID-19 situation has caused.  Yes, these words might sound over dramatic to you and, certainly, would not be the words you use when making someone redundant, but it doesn’t stop these words being heard.  Think about it, you joined a company where you feel you belong; you have built friendships (and possibly the odd enemy), have a routine and know what money you have to spend on your life outside of work.  Begrudgingly, for some, you might even enjoy what you do.  Then one day, you are called into an office and told all that is about to change.  You hear “blah, blah, blah… redundancy.… review period… services not required anymore” which for many can sound like “we don’t love you anymore”.  Just think of the heartache when you hear those words and the uncertainty they bring.

Is it time to put your adult pants on?

Companies need to look at how they can work differently, they need to consider how they can flourish in what are less than certain times.  Nobody wants to go through redundancy, whether they are the managers of a business, the team that remain within the business or those who are made redundant, but for many businesses this may be the only way they can survive.  As managers, though, we need to put on our “adult pants” and make some brave moves; either we make some decisions or decisions will be made around us.  So, can we make this more palatable for all?  Well, it can never be perfect, but there are things we can do to make it a better situation for all of us.

Make redundancy the last resort

If you have previously recruited and managed through sound business process, then you will have the team that, at least at the time, you knew you needed.  COVID-19 may have changed some of your practices and customer demand, but does this really mean you need to make any of the team redundant?  Consider these points:

• How quickly will your sales return? Offering redundancy now, only to need similar people in 6 – 12 months’ time, will undoubtedly cost your business more.  You will have the costs of redundancy, recruitment, induction and training to consider, let alone the lost sales that will occur from being understaffed.
• How can the Government financial support available help your business and will it help you avoid redundancies? Under the extended Job Support Scheme, the Government pays two thirds of normal wages capped at £2,100 a month. The Job Retention Bonus provides a one-off payment of £1,000 to UK employers for every furloughed employee, who remains continuously employed until the end of January 2021.
• How have your processes changed? If your processes have changed, what is the impact across the business?  It may be that you don’t need people in certain positions but could move them within the company.
• Who is close to retirement or is dissatisfied in their work? Early retirement packages and voluntary redundancy are more positive ways of reducing the workforce.
• Lay-offs and short-time working might offer short-term solutions. It needs to be carefully agreed but can provide a practical solution for all.
• Release contractors first. This may open up some opportunities for team members to be moved / retrained.

Whatever decision you are going to take, it is vital that you remember the value of good people.  We all know that it is easy to find people for a job but hard to find the right people and, even with the best, we still have to go through some form of induction and training process.   According to Glassdoor, the average cost for recruiting an employee is £3,000 and takes 27.5 days but this doesn’t take into account the cost of training or the lost opportunity whilst others are helping either cover the role or mentor the new members.  Add these figures in and this cost rapidly increases and costs rise even more sharply when looking at specialist roles and industries.  So, if we have good people, it is still in our best interests to see if we can retain them. 

Planning is critical

Whatever you decide to do, it is vital that you do not rush your decision.  These situations are not just hard on those who are being made redundant, but also on the team and yourself.  The shadow of redundancy makes everyone more sensitive, heightens tensions and can significantly reduce team morale and productivity.  Prolong this activity and it makes matters worse still.  Just as making too many people redundant can be a problem, we have seen companies underestimate their activity, resulting in the need to carry out multiple redundancy actions within the space of a few years.  The impact on morale and belief in the management team in these latter situations was huge and resulted in many people seeking jobs outside of the companies.

What if we do need to make redundancies?

We’d recommend  that you have a third party involved with this decision-making process right from the onset, specifically your internal HR team or, if you don’t have such a team or the relationships are too personal, an external HR team.  Failure to involve them from the earliest stage can result in very messy situations leading to court action and heavy costs, both financially and professionally, let alone the damage it can do to those leaving the business, as well as the current team.

The process will vary depending on several factors. For example, the number of redundancies, and we have found the importance of our HR Advice team working with you at every stage. We have found we can really add value, providing advice of alternative structures, provide you with tailored letters and responding to any specific questions your team may raise.  It is essential that you follow the correct procedures, taking into account the right length of consultation periods, a fair selection process etc., otherwise the whole procedure can be much more painful and prolonged, for all concerned.

Feelings and Supporting Employees

The whole process can look very clear and methodical, but I assure you it is not.  Emotions can and do get involved, especially in a small company.  All it takes is for one person to feel that they are being treated unfairly and it can have a knock-on effect with others staying with the business.  This, in turn, can lead to all sorts of short to long term issues, including losing the support of staff you desperately need to keep.  Not only that, but what if they come into contact with your clients?

A redundancy situation can also have a significant impact on the morale and wellbeing of employees in the organisation. Fears about job security and income loss have risen during the pandemic and many people’s mental health is already at a low ebb. The economic climate and predicted large-scale increase in unemployment will further exacerbate some people’s concerns about finding another job.

Therefore, it is important that employers approach a redundancy process with compassion and treat everyone with dignity, respect and kindness. Handling redundancy in a humane and compassionate way can make a significant difference to how people cope with the process. It will also have an impact on other employees in the organisation, who can be affected by the unsettling experience of seeing their colleagues being laid off and feeling their own job security is at risk.

One Option is putting in Outplacement Support.  Increasingly seen as so important today.  It offers the individual real hope and support, at, what will probably be, one of the most difficult times in their lives. It provides them with expert, independent advice and support, tailored to their particular needs and it allows you, and your company, the knowledge that you have done as much as possible to help. Who knows, with this support, they might find a career they enjoy even more and come back to thank you one day, something we have already seen happen. Click here for more on our Outplacement Support Service.

So, yes, whilst initially, and especially during redundancy proceedings, it will be painful, you can rest assured that in the longer term everyone can feel the better for it.  It’s just a case of preparation, communication and carefully following redundancy processes.

So, if we can help with the redundancy process, or with Outplacement Support, please do Contact Us on 01844 216290 or enquires@sylobeyondhr.com.

We offer a free half hour consultation for all new contacts.

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