The Best Way to Make Redundancies – a compassionate redundancy processNatalie Lewis
The redundancy process is a horrible thing for everyone. They are filled with emotions, hurt, frustration and overwhelm for all parties.
Over the years I’ve dealt with employees who were glad to have been made redundant, others who have cried and I’ve even had a chair thrown at me during a consultation meeting!
I’ve also dealt with employers who have cried on me, shouted at me, wanted to give up and one case where the director was so low, he attempted to take his own life.
There’s no rule to how people will react.
Going through a redundancy process is hard and emotional but get it right and you will win hearts and minds on many levels. Those employees that remain with you will have seen you act with integrity and compassion. Those who are made redundant should leave with a feeling of positivity towards the company. You never want to burn bridges or gain a reputation for dealing with things like an ass-hole.
This is a long blog, full of information that will help guide you through this tough process. Do please get HR/legal advice if you’re considering dismissing anyone – this blog is not a guide to the full redundancy process but rather how to run the process in the best possible, humanised way!
How do you prepare for redundancies?
Firstly, you need to have in mind that the best way to approach redundancies is to cut once and cut deep – if you need to make redundancies, try and do it on one phase, otherwise, your people will always be in a state of ‘what if’ and anticipating the worst. That’s really bad for morale and productivity!
Next, you need to make sure you have a genuine business reason for cutting head-count or restructuring. These are the questions I ask my clients;
- Has there been a downturn or a likely downturn in work?
- Has there or will there be a cessation (stoppage) of a certain type of work?
- Do you need to cut costs, resulting in the reduction of staff numbers?
- Is the business closing/moving?
- Have you introduced new systems/technology leading to a reduced need for staff?
- Have you changed your processes or strategies resulting in fewer staff required?
You’ll also need to evidence any cost saving that you’ve done prior to considering making redundancies;
- Have you introduced a recruitment freeze?
- Have you stopped any over-time hours?
- Can you let go any temps/agency workers?
- Have you negotiated lower payment terms on rent/rates/supplies etc.?
- Have you considered reducing salaries in the company as a whole (temporary or permanent)?
Top Tip: This cost-cutting exercise is so important and I would encourage you to share this with your employees so that that can transparently see all the actions you’ve taken before getting to the point of having to cut head-count.
Who’s going to be affected by the redundancies?
There are two aspects to this; the practical aspect and the emotional one.
Practically, you need to look at which roles are affected in your business and determine the ‘selection pools’. Get professional help on this. I’m not going into detail on this aspect of the redundancy process in this blog, suffice to say that anyone who does a same/similar role is normally classed as being in the same selection pool and would all be put at risk of redundancy. You’d then use selection criteria or interviews to determine who stays and who goes.
Emotionally, everyone will be affected in some way or another by redundancies.
Consider the effect on the company owner/director, if that is you, please consider seeking the services of a superb HR consultant who can support you both practically and emotionally (I’m just a phone call or email away).
Consider the effect on the managers carrying out the process, the emotional effect on the employees ‘at risk’ of redundancy and those who will be left behind.
Top Tip: If you can provide an Employee Assistance Programme with free 24/7 counselling and emotional support, this would be ideal. If not, be sure to signpost everyone in the company to the likes of Mind, The Samaritans or their GP for support.
What redundancy process should I follow?
This will very much depend on how many redundancies you are planning to make. If you plan to make 20 or more redundancies, then collective redundancy rules apply and you must allow at least 30 days for consultation before any dismissals are made. (For more than 99 redundancies, at least 45 days must be given for collective consultation before dismissals are made).
Where fewer than 20 redundancies are planned, you’d normally consult individually and the consultation process is more fluid in terms of timelines and process. The process can often be quick (less than 2 weeks) and pretty simple.
It goes without saying that a fair and lawful process should be followed. The redundancy process has a clear structure that needs to be followed. Failure to do so could result in tribunal action and a reputational backlash. Get professional advice!
The brutal part, in my opinion, is making decisions between who stays and who goes. It’s really de-humanising. Either you use a selection matrix based on set criteria which may include behaviours, performance, cultural fit etc. or you ask employees to re-interview for their roles. Ugh! I once went through that interview process and it was horrific. Please don’t make the interviews uncomfortable and grill people. Be as supportive as you can.
Top tip: Never draw out the process and make it longer than it legally needs to be; have a clear plan, time frame and a way of answering questions for everyone. Pointless meetings and unanswered questions can add to what is an already stressful process.
How can I make the redundancy process easier?
Perhaps the question should be, “can I make the redundancy process easier”? The answer is yes but it will take a little more consideration, planning and awareness than is normally applied to this process.
Make sure your people know they are being listened to – this is what your consultation process is about but I’d recommend that you triple the amount of communication you have with all staff; those at risk and those who aren’t. You can try to hide the fact that you’re making redundancies from the rest of the company but they will find out and then they’ll question your integrity. Nobody wants to work for an underhanded company.
I’ve written before about trust being your greatest currency, so during this process ask yourself whether you’re buying trust or losing it.
Let your people know that they and their opinions matter. Whilst you may have little control over the circumstances that have led you to this place of needing to lose staff, you have every control over how you manage the process. Give your employees time and space to express themselves. Again, this would usually be in the consultation meetings but you can be creative in creating a forum or support groups. Don’t shy away from allowing staff to discuss the current situation, just because you feel uncomfortable about it.
How can I support those people being made redundant?
At some point you’re going to have to do the deed – you’re going to have to give the bad news to some of your employees that they’re being made redundant.
Let them know what support is available; even if this is the free advice via ACAS or Citizens Advice. You can signpost them to well-being charities, the Money Advisory Service, JobCentre Plus and the job boards. There are plenty of websites out that that show people how to write a CV or brush up on interview techniques. You could even pay for outplacement/career coaching if it is within your budget. Coaching starts off around £50pp.
If you can’t pay for support then consider giving them more than the statutory time off of 4 hours a week to attend interviews, meet with agencies and prepare themselves for what’s coming.
Top Tip: Some of my clients have even been known to call the MD of their rivals to ask if they have any vacancies for the staff that they need to make redundant. Put pride aside, be humble and do everything you can to help your people.
How do I manage the remaining staff after redundancies?
Be aware of ‘survivor’s syndrome’ for those staff who remain in your employment. Your aim throughout this process is to show everyone that the company treats their people fairly and with respect.
When restructures and redundancies are announced, there can be an increase in performance, as individuals try to demonstrate their worth in the hope of retaining their jobs. This is often short-lived as worry and uncertainty then takes hold.
Your survivors will, of course, be relieved but when that subsides, it gives way to anxiety over the future, illness (if they have found the restructure process stressful) and anger if they have seen colleagues and friends lose their jobs. Fear for the future can compound worry over the potential of further redundancies and all of that can lead to a whole host of negative emotions. If not addressed, these anxieties can ripple right through a company’s remaining workforce, sending staff motivation and productivity into decline.
Clear lines of communication are critical. The best thing to do is acknowledge what has taken place. A clear vision for the future lets survivors see where their role fits in will be the foundation for boosting morale, raising performance and allowing the business to move forward.