How To Manage Redundancies Properly
Losing people from your business is hard enough at the best of times but when the world has been rocked by a global pandemic and the associated fallout, well, it’s a lot more difficult.
Managing the process of staff redundancies is a hugely stressful time for all concerned. Redundancies impact upon people’s emotions, finances, their sense of wellbeing. That’s why it’s so important to get it right.
In this article, we’re going to give you a quick overview of the redundancy process and then we’ll dive into some of the more challenging questions we get asked on a regular basis.
Overview of the redundancy process
Put simply, a redundancy situation arises when a role becomes redundant.
Sounds simple but that’s often a key point that people forget – it’s the role, not the person that is being made redundant.
Redundancy is when the business deems that a particular role is no longer needed or able to be sustained. This decision can be reached for a variety of reasons such as those duties can be absorbed elsewhere, there’s been a change in business activity, or there’s been a restructure so that the organisation has changed in such a way that the role is no longer required.
In short, the role no longer exists. It’s not related to the person currently occupying that role.
How do you select the people that would be made redundant?
As HR advisors to companies across the UK, we are often asked by employers how to choose the people to be made redundant.
The selection process depends on your employee headcount. If you have fewer than 20 employees, the redundancy process is a faster process than because you have the option to do group consultations.
Before you move into the selection process itself. It’s important to take some time to analyse business activities and plans because, when you make a role redundant, you can’t really rehire into that role for six months. So, look six months ahead and think about what you’re going to need. Of course, contact us if you’d like some help mapping out your future skills requirements for this period.
Once you have your business and role requirements decided, you’ll be left with a much clearer picture. You’re likely to have a group of people currently occupying the at-risk roles – this is when you need to draw up your selection criteria.
Every business is different and you determine what the redundancy selection criteria will be for your company.
We always suggest that you avoid length of service which has been used in the past for the selection process – this is not a good selection measure and comes with risks. More appropriate types of selection criteria include employee qualifications, disciplinary history, absence records, productivity & performance results, and similar.
Using these criteria, you can then create a scoring matrix. By listing the various selection elements, you can then allocate scoring weights to each one. For example, if a sales role is to be made redundant, you may give more weight to the sales results row in the scoring spreadsheet.
You then work your way person-by-person through the spreadsheet and allocate scores to each employee for each of the various selection criteria. This gives you an objective or more defensible way of selecting who would then be put in that at-risk pool.
We always advise our clients that it is very important to document the selection process (and for any other similar HR-related process) right from the moment you start talking about any potential restructuring through to the scoring and selection process and beyond.
We would always recommend that more than one person is involved in that scoring process to help ensure fairness, consistency, and transparency.
Can you make someone redundant when they are on furlough?
The short answer is, yes, you can make someone redundant when they are on furlough, but there’s a lot to consider.
Furlough was introduced by the government to protect people’s roles during the lockdown. Unfortunately, it does appear that the negative economic impact of the coronavirus will continue and it will have a far-reaching effect on UK business.
At time of publication, furlough finishes at the end of October so, yes, you can start the redundancy process now with people who are on furlough. Just make sure that you follow the correct process and note that all the normal legal requirements around redundancy still apply.
Can you make someone redundant when they are on Zoom?
Yes, you can make someone redundant via a Zoom video call as long as you follow the correct procedure. The important thing is to have the redundancy conversation face-to-face. It can be Zoom or Skype but it’s all about following correct procedure the whole time from initial conversations through to follow-up meetings and close-out. That said, nothing beats a real, in-person conversation if it is at all possible.
How do you actually have the redundancy conversation?
It goes without saying that being made redundant is usually a terrible time for the person leaving. It is also a very stressful time for the business leaders who have to have that redundancy conversation.
We are often asked by employers: ‘How do I actually run that meeting? What do I say?’
Begin by asking the person to a business review meeting and let them know they can be accompanied by a work colleague. In that meeting, let them know that, due to business circumstances, their role is at-risk. Tell them that no ultimate decision has been made yet as this is simply the start of the communication process and you’re informing them of a potential redundancy situation and the reasons for the change. Explain the process that you’re going to follow during the consultation period, what’s expected during this time, and what happens next. Confirm in writing that they are at risk, the reasons why, and what is involved in the process.
During the consultation period, the affected employee has the option to submit any proposals or suggestions that may help the business avoid the redundancy or ways that they can be retained within the business a. Further meetings may be required to follow-up on any such proposals. If the business isn’t able to implement their proposals, you will need to explain the reasons why they are not possible. Finally, you will have a meeting where you confirm the outcome, when the redundancy takes place, and what happens next in terms of administration and departure.
What happens to the people left behind?
Redundancy is obviously a hugely stressful time for the people leaving but what happens to the people left behind? It’s really important to extend your communication to your wider team because it can be a very unsettling time for people who aren’t directly affected by the redundancy situation. After all, friends and colleagues are leaving in sad circumstances – it affects everyone in different ways.
When any employee first hears the word ‘redundancies’ mentioned at their workplace, the first thing going through their mind is: ‘Is it going to be me?’ You should aim to be communicating quickly and effectively that you have entered into consultation regarding a number of roles and that these consultations have now taken place. Let people know what the next steps are going to look like in terms of timescale and communication.
It is very important that line managers offer one on one support and are checking in with their team members on a regular basis to help maintain morale and engagement. This includes checking in on people in the redundancy pool as well as staff who are not at risk.
Prevent redundancy-related problems
With so much at stake in terms of redundancy payments, unfair dismissal claims, discrimination claims, business performance, and staff morale, redundancies need to be carefully managed.
If you’re not 100% sure of the process or if you want to finetune your plan, please check in with us at HR Star – we’re just a phone call or an email away. Even if you want to manage the whole process yourself, it’s just worth checking in with us. We can make sure you’re on the right track because it can get very messy if it goes wrong.
Earlier in this guide we explained how to manage a redundancy process properly. One other thing to note: when the person finally leaves, do make sure that your IT people know to suspend or stop access to the IT systems. The last thing you want is someone in this highly emotional situation to start emailing your customers with angry updates.
Overall, you need to follow a well-planned and well-documented, fair, and clearly communicated process from start to finish.
Try your best to achieve a positive exit of redundant staff because when they go out into the wider community, they can be either a positive or a negative ambassador for your business. It comes down to how you handle the process and the respect you show them throughout their difficult time.
Next steps – Need some help?
It’s an appropriate time for business leaders to really stop and reflect. How have we been doing things? Can we make improvements? How can we improve efficiencies, scaling back now, but be ready for growth again when we come out the other side of all this? Try to look for those positives.
If you need some help with redundancies, contact us at HR Star.
We have the HR Star Membership – you can become part of that membership and access a whole resource library of tools, How-To guides and templates, and more.
Alternatively, just get in touch with us and we can run through the process with you.
A number of clients actually have us managing the whole redundancy process for them. They do this because of our expertise and because we are at arm’s-length away which helps when you have a small team and you’re very close to your team members. They can step back from that process and from the difficult conversations.
Whatever kind of support you need, just click here to get in touch.