Redundancy and restructuring can be a difficult time for any organisation. The uncertainty that accompanies restructuring and redundancy is one of the most stressful experiences a person can go through.
The last 18 months has certainly put these HR issues at the forefront of many peoples’ minds. The Coronavirus pandemic has led to twice as many redundancies being planned compared to the height of the 2008-2009 recession. However, regardless of COVID-19, it is essential that it restructuring and redundancy is done right for both employee and employer.
Here are our 10 top tips to take into consideration when making redundancies or restructuring.
Take your time
Often when a redundancy situation arises, it can be tempting to try to just ‘get through’ things and end up rushing the process. This increases the likelihood that an employer will make mistakes or miss opportunities to mitigate the impact of the redundancy (like failing to find out staff would have considered pay cuts). Familiarise yourself with the process and give yourself, managers and staff time to reengage properly. It will save time and expense in the long run.
Keep an open mind to alternatives
An employer can feel like redundancy is the only solution, but is it really? Back in the 2008 recession, many businesses were taken by surprise at how many employees were prepared to move to part-time hours, for example. Keep an open mind and consider any alternative suggestions from managers, advisers or the workforce.
Set-up managers for success, not failure
Busy, untrained and unsupported managers are likely to make a bad situation worse. Managers need to be trained to understand the redundancy process and how to handle consultations and challenging conversations. They also need looking after, so make sure they have support for their own wellbeing.
Don’t keep unnecessary secrets. Many employers hold back information about their financial challenges. But keeping your people in the dark is counterproductive because bad news, when it does arrive, comes out of the blue. Businesses should be open, transparent and honest. Make sure managers and the workforce receive information in a timely fashion.
Communicating poorly, or not at all can be disastrous. Communication around redundancy is often unhelpful or excessively distressing: leaving a message on a notice board, telling some teams before others … Waiting too long is also a problem. It limits the time to discuss the situation and information may get leaked, damaging trust. Communicate early, regularly and consistently.
The concept of consultation is simple but often misunderstood. At one extreme, employers can encounter a range of legal issues and missed opportunities by consulting only as much as they think is legally required. At the other, firms that try to consult extensively can feel they end up negotiating with their workforce on every point.
Use fair selection criteria
Employers can unintentionally use criteria that disadvantages those with protected characteristics. During the pandemic, be particularly mindful of not disadvantaging furloughed workers or care givers.
Be clear about payments
Give each employee a full breakdown of how much redundancy pay they are entitled to, how the sum was calculated and confirmation of when and how the payment will be made. Confirm how much is tax-free and detail any other monies owed, like a final pay package and accrued but untaken annual leave pay.
Think about the future, as well as the present
Focus your energies on both carrying out a fair process and planning the future of the business and the restructuring of the remaining workforce. Setting and agreeing reasonable objectives and workloads for remaining employees is important.
Always try to end on a good note
Redundancies are a challenging and distressing situation for affected employees. Treat your people with dignity, fairness and respect and end employment relationships as positively as possible. Think about your employer brand.
We have plenty of advice on redundancy and restructuring on our blog and across the website. If you need to speak with us on this, please give us a ring on 0203 667 7720 or email firstname.lastname@example.org.
In the meantime, here’s some more reading on the topic:
Managing Change: Redundancy – All about the management of change that comes about from the need for redundancy.