Right now, it’s a grim place out there for some businesses. And quite frankly, nobody wants to let people go. But, it’s understandable that you’re thinking this way, when your biggest outlay is probably staff wages 💷
I'm now getting a lot of calls about redundancy from small business owners. Some are asking about the redundancy process and others are wanting to brainstorm with me to see how they can avoid redundancies 👍
And whilst in some situations it will sadly be the only option, you DO have an obligation to explore other options. And what’s more, it's good to involve your employees in the process if you can, because they then truly believe you have considered all the options and be more understanding (and less difficult) if redundancy becomes a reality.
The government’s Job Retention Scheme is being slowly phased-out over the coming months too. So, you might feel you’re being left with no choice. Although the £1,000 bonus for keeping furloughed staff on until January, may help a little.
IF YOU ARE HAVING A TOUGH TIME, YOU’RE NOT ALONE
Check out all the news sites and you’ll see that over the last few weeks, massive brands have announced redundancy plans. For example: River Island, Harrods, DHL, EasyJet, Upper Crust, and the BBC. And let’s face it, that won’t be the end of it.
I read an interesting article in Personnel Today, where Neil Morrison, group HR director at Severn Trent described what’s happening as a “human crisis” – as opposed to the “financial crisis” in 2008. And that’s something that might resonate with you.
However, you do have choices. It’s about getting creative and seeing if any of them could work for you and your people – now and in the future 🤔
And it would be remiss of you to make people redundant only to need to hire them back in six months time when things hopefully get back to normal.
BEFORE WE BEGIN…
Okay, so in this blog, I’m going to suggest other things you could do to avoid making compulsory redundancies. But please remember – if you change your people’s contracts in any way – you’ve gotta follow a proper process.
Also, if there’s a chance you might be making more than 20 employees redundant, there are formal collective consultation rules you must follow. Even if you’re not, you must consult with your employees. Never start the consultation process with a decision already made. No way! The whole point of a consultation is it's a two way conversation to see if you can avoid redundancies in the first place.
When it comes to the ‘R’ word, whatever your circumstances, always remember to:
- Be super fair and reasonable
- Stick to proper processes
- Sound things out with your employees
- Get expert help from a HR pro
Redundancies can qualify as unfair dismissals if they’re not done the right way. And you don’t want to end up in an employment tribunal now do you?
START BY ASKING THE MOST OBVIOUS QUESTION❓
And that question is: "Why are you considering making redundancies". Are you looking to save money because of cash flow issues. If so how much? Or are you stopping a service you offer? If so, are you offering something else instead? Redundancy is all about letting people go mainly because you no longer need them to do a particular job for you or because you can't afford them.
If its not a cash thing, could use their skills to do something else that benefits your business – if it works financially. Have a chat and see what the art of the possible might be. But remember to be sensible AND sensitive about any alternative work you offer. It has to be a “suitable” alternative and it’s got to be trialled first.
👉 Acas give some really useful advice on what makes an alternative job “suitable” right here.
WAYS TO AVOID FORCED REDUNDANCIES
1. Is there anyone who wants to go?
One option is by asking if any of your employees and interested in voluntary redundancy? If so, this can be a win-win for everyone and save you having to go through the painful consultation process with staff 👋
Covid-19 has caused loads of us to re-valuate our lives and discover what’s really important to us and this is causing some people to take voluntary redundancy.
Also, if you do go down this route, don’t target individuals, make it available to all. And make sure you’ve got a really fair process to determine who stays and who goes.
2. Could people go flexible
Lockdown has forced heaps of us to work more flexibly. And as a result, you may have employees that actually want to work flexibly on a more permanent basis – through things like part-time working, job sharing, and term-time working.
Of course, flexible working won’t appeal to everyone. Lots of families are out of pocket because of the coronavirus – and therefore won’t be looking to earn less. It all depends on what their personal circumstances are.
But, a second option could be some or all staff members to reduce their hours, to avoid redundancies (if this could be enough of a cost saving?) If people feel it could save their job (or their colleagues jobs) they may be more open to it than the alternative of not having a job.
And fewer hours will mean a smaller wage bill 📉
CUT DOWN YOUR SPEND ON OTHER THINGS
To prevent you going down the redundancy road, could you look at some other creative ways to save cash (always consulting with your employees of course if appropriate)
You could do this by:
✔ Stopping overtime – whilst being mindful of staff who’ve got totally used to having it.
✔ Temporarily laying people off – but if it’s not in their contract, they can say no. Don’t do this for longer than four weeks though, or else they could claim redundancy pay. And what’s more, whilst it’s not as much as you usually pay them, you will have to pay your employee ‘Statutory Guarantee Pay’ while they’re off.
✔ Temporarily stopping all recruitment and letting go of contractors or freelancers – which is super hard I know, but hopefully you can re-visit this decision when things pick up again.
✔ Stopping benefits - If you offer your employees a benefit, such as weekly lunch, fruit basket etc. could you cease these to avoid redundancies? Equally, employees may be willing to sacrifice their Christmas party, fancy stationary or bonuses to save their jobs
✔ Do you need an office - If you rent an office, but have found working from home is do-able, could you save enough by closing the office? Again, just something else to consider as the costs of this will often be substantial
CONSIDER YOUR TIMING
If you’ve got staff on furlough today – you’re getting funds from the government to help pay them. But from August 2020, the Job Retention Scheme means you’re going to have to start contributing, until the scheme closes in October. Although you’ll get a £1,000 reward for keeping them on.
So, while you can get some help from the government, could you put off redundancy plans until the help completely runs out? One to think about 💡
KINDNESS COUNTS 💚
It’s been a rubbish 2020 already for many people. So, if you do end up having to make redundancies – be nice. Go about it in a fair and reasonable way. And above all else, be human. Give people time off to look for jobs, write them a reference etc.
TO SUM THINGS UP THEN
- Yes, you do have choices available to you. Redundancy is not the only answer and you’re legally obliged to weigh up all the alternative options anyway ⚖
- Whatever decisions you make, it’s important you follow the proper processes to avoid ending up in an employment tribunal for unfair dismissal ❌
- Before you do anything, see if you could re-deploy your employees in other ways 🤔 or consider if they’d want to: take voluntary redundancy; or opt to work more flexibly – of their own accord 👋
- While you’re getting help from the government, consider putting your redundancy plans back a bit 📅
- Finally, 2020 has been a horrific year for many people. So, don’t forget to be nice 💚
- If you want to save some stress and bags of time, then get my Redundancy Toolkit, which guides you through the process and includes all the letters and forms you need
If you’d like to chew the fat over what to do, or you just want to make sure you’re playing by the rules – reach out and book a free consultation with me.
Virtual HR Director & Leadership Mentor. I create game-changing HR & Hiring Strategies for ambitious small businesses in the UK and support you to lead your team with confidence. Check out my shop to download HR Templates & Contracts designed to make life easier.