The key components of a well-managed redundancy process
The key components of a well-managed redundancy process | By Lauren Long at HPC
For business owners and HR professionals alike, the redundancy process is the one aspect of people management that we would avoid if we could. However, the fall out of the pandemic has left many companies revising their HR and business strategies as a result of a downturn in work, the unfortunate result of which is compulsory job losses for many. It is imperative that employers follow a formal consultation process when considering many any positions redundant.
If you have identified the necessity for redundancies, navigating your way through the process can be complex but getting it right is crucial to ensure that this is done sensitively and lawfully. A failure to handle this process carefully can lead to costly Employment Tribunals claims as well as a disengaged workforce, which we know manifests itself as a plethora of disruptive issues.
In my experience of supporting business owners with this process, I have noted what I believe have proven to be the key components to a well-managed redundancy process:
Oftentimes, those of us behind the scenes of a business can overlook the fact that most of the workforce do not have the insight that we do and therefore lack understanding of the real need for significant change. When making redundancy announcements, being as transparent as possible about the position of the business so that employees are fully informed of the rationale behind these decisions can help to alleviate the personal element that people often feel in redundancy situations. If you can share information such as the business’ financial position and what the required cost-saving looks like, employees have a better understanding of why the business is in the position of needing to make redundancies and understand that this is a genuine need.
Make it meaningful
While following a process is necessary for compliance with relevant Employment Law, it also has real purpose and can often prove to be really insightful to both employees and employers. When running a consultation process, it is important that employers engage meaningfully in the process rather than just focussing ahead to the outcome, as you otherwise run the risk of this simply becoming a box-ticking exercise. When employers just focus on the outcome, this becomes quickly apparent to employees and valuable feedback or suggestions are missed. Not only can this create a potential unfair dismissal risk but you could also be over-looking important and useful feedback that is coming from those employees on the ground. I have facilitated many meaningful consultation processes whereby the proposals put forward by employees are duly considered and have proved viable, resulting in jobs being saved and efficiencies identified that will support the future of the business.
It goes without saying that communication is key, however, I have witnessed many employers holding back key information or not keeping in touch with employees throughout the process. This inevitably adds to the anxiety that the employee is already experiencing and this can lead to further issues such as absences or formal grievances, which can delay the process in hand. A lack of communication is also the cause of much frustration for employees, as they often perceive that their employer does not value them or the personal impact this will be having on them. Keeping communication with affected employees fluid and letting them know that you are on hand to support them illustrates that you acknowledge the sensitivity of their experience. You could improve communication by ensuring employees are fully informed about each stage of the process, notified of any proposed timelines if possible and kept up to date on the progress of the consultation.
Finally, the one thing that we shouldn’t underestimate but is quite often over-looked when making redundancies is the impact those job losses have on the colleagues that have been able to remain in the business with their positions safe. Employees who remain in the business often experience ‘survivors guilt’ when their close colleagues have lost their jobs which can lead to them disengaging with the organisation. Furthermore, although safe in their positions, the remaining members of the workforce may be worried about what the future holds for them. Keeping employees updated on the vision and direction of the business and where they fit into this can prevent employees from leaving voluntarily, in anticipation of future risk to their job. This can be incredibly damaging to organisations who during challenging times, absolutely need to retain talent in the business.
If you have any concerns or would like to discuss things further, please get in contact with the HPC team today.
T: 0844 800 5932