Redundancy: 5 tips for business owners

There has been a lot in the news recently about redundancies. As a business owner, making redundancies is never easy but there are ways to make it easier on staff.

What is 'Redundancy?'

The definition of redundancy is that ‘the requirement for the work performed by that role has ceased or diminished.'

In a very public situation in the news recently, this was not the case.

Redundancy Should Always be a Last Resort

WeDo HR Support have put together our top tips to look at before redundancy to try and avoid the process, and when there is no alternative to staff redundancy.

1. Consult with Staff

The first thing you should be doing is consulting with people – let them know how bad things are and what the outcome may be, i.e., redundancy. This can have 2 impacts.

Firstly, staff are creative they often come up with ideas for how the company can save money.

The second is some employees will move on – they don’t like uncertainty or waiting to get made redundant. They consider finding another role before the market is flooded with their colleagues. This reduces your headcount cost and reduces the final cost of redundancies.

2. Consider Reducing Staff Hours

If staff already know how bad things are, consider offering staff:

• Flexi hours
• Part time hours

3. Agree on Pay Cuts or Reduced Working for a Period of Time

• Negotiate costs with Unions
• When working in travel in the 90’s, we took pay cuts, 10% for senior managers, 5% for branch managers, 4% for assistant managers, down to 2% and 1% for juniors.
• We also cleaned our own branches to save costs on cleaning, brought our own tea and coffee from home and turned down the heating.
• Ask for voluntary redundancies and negotiate early retirement packages or extended unpaid maternity or paternity leave.
• Offer sabbaticals, unpaid study leave for anyone who wants to do a qualification.

This saves money and offers real benefits to some people. For example, a maternity leaver who has had 12 months off but really would like more time with their baby, but is returning because 12 months is all they can have off – agree to keep the role open for them to return to for a further 6-12 months, unpaid.

4. Redundancy Route - Legal Advice

If you do have to go down the redundancy route, make sure that you are following the law. If you have more than 99 roles to lose you must fill in a HR1 form and send it to the Government.

You must offer meaningful consultation for a period of at least 45 days.

You must offer roles you have elsewhere in the organisation.

5. Contact the Experts

We hope this gives you some insight and solutions to support your business when it comes to staff redundancies. If you need any further advice on the redundancy process, then please contact us directly through The Directors Choice website and we would be happy to assist your business.

Blog by WeDo HR Support

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