HR Grapevine
HR Grapevine | Executive Grapevine International Ltd

Getting better at redundancy

How to reduce the impact of redundancy on both employees and the business
Getting better at redundancy
 

So long, farewell


How to reduce the impact of redundancy on both employees and the business

Words by Kieran Howells| Design by Theo Griffin

It seems, at least based on some of the news stories that HR Grapevine comes across, that a significant number of employees are subject to ethically questionable practices when facing redundancy – despite the issue being a potentially traumatic one for employees. However, it is a core part of HR’s job. “Dealing with redundancies unfortunately comes with the HR territory and whilst not the enjoyable part of any HR professionals role, sometimes it is necessary,” Jennifer Lawrence, HR Director at Costcutter explains. “Where good working relationships exist, it is possible to have good quality conversations to highlight likely changes and discuss redeployment options. Obviously, this doesn’t mean ignoring internal processes and employment rights but a great outcome (if done well) would be a colleague transitioning into an alternative role without the unsettling experience of being put at risk.”

“Being mindful of the impact of this on an individual's wellbeing and ensuring that everyone feels supported, whatever role they are playing, is a really big thing”

HR’s role in redundancy
Research from human capital consultancy firm Lee Hecht Harrison Penna found that one in 10 fear being made redundant in 2019. Yet, according to the ONS’ December 2019 report on the UK labour market, redundancy rates are actually at their lowest rate since its records began in 1995. Whilst many more fear that their job is on the line than is actually likely, it is up to HR to make this process, should it come to pass, as compliant, legal and watertight as possible – keeping both the business and the employee at the centre of their thinking.

“Redundancy situations are never easy. It’s an emotive subject and they can be difficult to manage,” states Ian Deakin, Senior Associate Lawyer at Browne Jacobson. “Communicating effectively to employees that there is a redundancy situation and what the process will be is critical.” For HR, a redundant employee is still under your charge of care whilst in the workplace. They must be afforded all of the courtesy that you afford to every other worker under your care, which means being honest and open to questioning as the individual comes to terms with their job loss.

Zoe Ogden, HR Director at UNiDAYS says that compassion is just as important to ensure that the outgoing employee’s transition is as painless as possible. “It's such a difficult time for everyone involved. Those at risk, those not at risk and those enacting the process (HR). So being mindful of the impact of this on an individual's wellbeing and ensuring that everyone feels supported, whatever role they are playing, is a really big thing. It doesn't have to be an awful process if everyone is treated with respect and compassion,” she states.

Generally, the key elements of a redundancy conversation need to be why the move was necessary, either notice time or garden leave, redundancy pay and reference information. Ogden believes that this has as much to do with your conviction in delivering the news, as the content that you’re communicating. She tells HR Grapevine: “You need to be so clear on all of the details. If you start to look unsure, then people will lose faith in the process you are running. And it's natural for people to ask repeated questions. Don't be frustrated when this happens as they are just processing and seeking to understand. As long as you are clear and have all of the facts, you should be fine”

The Chartered Institute of Personnel and Development states that when enforcing redundancies, employers must inform staff about the following:

  • The reason for the redundancy dismissal
  • The number of proposed redundancies and their job types
  • The total number of employees affected
  • The proposed methods of selection
  • The procedure to be followed in dealing with the redundancies
  • The method of calculating redundancy payment

“Ensure that appropriate thought goes into which pools of employees will be at risk of redundancy and that there is a sensible rationale for this decision”

Legal concerns
Deakin states that it’s imperative that in a redundancy situation, staff are chosen based on legally acceptable attributes. For example, it is illegal to make a member of staff redundant simply for being disabled, or for having children. “Ensure that appropriate thought goes into which pools of employees will be at risk of redundancy and that there is a sensible rationale for this decision,” he states. “If compulsory redundancies are necessary, discuss the process by which individuals will be selected and ensure an open and transparent consultation process. Any process which scores employees to decide who stays and goes should be as objective as possible,” Deakin concludes.

Managing the team
Whilst managing the redundant employee with discretion is essential, many senior leaders simply ignore the effect it has on remaining staff. In the case of Deutsche Bank – the banking giant made the first of 18,000 cuts earlier this summer – restructuring left many uncertain of their future. Research conducted by the Institute of Employment Studies found that uncertainty not only increases turnover but also decreases productivity as workers worry over their career prospects. It also seriously impacts wellness.

“After making redundancies, it is essential that employers are able to rely on their existing employees to keep the business going and cooperate in running the business as efficiently as possible. In many respects, it is almost as important to deal with these people properly and fairly as it is to deal with those who are likely to be made redundant,” states Steve Blunt, Partner at law firm Clyde & Co. A separate ACAS study on the emotional significance of redundancy amongst the workforce found that 65% of employees at a company that had undergone downsizing felt that their stress levels had increased, whilst 63% confirmed that they no longer felt that they could trust their company after witnessing redundancies.

As a result, the CIPD recommends arranging a meeting with all at-risk employees to discuss the process and provide clarity on the vulnerability of their position; this could mean a specific job function, or an entire department. In these consultancies, it’s important to cover the reasons for the dismissals, the number of proposed redundancies, the proposed methods of selection and the procedure to be followed when dealing with redundancies.

 
 

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