How to handle redundancies during uncertain times

Post-pandemic, economic uncertainty is taking its toll on businesses of all sizes. If you’re anything like me, you will have seen several horror stories in your LinkedIn feed recently about former employees at Google finding out about losing their jobs via an automated email. While mass tech layoffs have been widely reported in the media, the impact of economic uncertainty will certainly be felt across all sectors….. and of course we have been through economic uncertainty before.

The world appears to be on alert due to interest rate rises, which are likely to continue, as will inflation, global uncertainty and so on. To safeguard their survival, many companies will be forced into making strategic decisions that ultimately impact their business structures. All while trying to minimise damage to the company from a public-facing perspective and solve skills shortages among their workforce.

Unfortunately, as hard as they can be on both employers and employees, redundancies are at times a commercial or business necessity. Here are several factors businesses should consider when handling redundancies.

Communicate transparently and clearly

People are central to every business. While speaking with your employees about redundancies is likely to be challenging, it’s important to be transparent and open with people about the reasons for the redundancies. Before engaging with employees, ensure a clear process is in place, including the criteria that will determine the roles to be made redundant. Be ready and willing to answer any questions people have as best you can. Most people would agree that discovering you’ve been made redundant through an automated email is unacceptable and lacks integrity. Given people talk about and share their experiences widely on social media platforms, such actions negatively impact your organisation’s brand and reputation. Making people redundant definitely requires a face-to-face conversation – of course this is often online now too, as hard as that may be. Remember, things can change quickly in the business world, and when you’re looking to hire again, you want the top talent to come and work for you.

Support people as best you can

Employers have a duty of care to look after their people to the best of their ability. I understand redundancy can be a gruelling process for everyone involved, but always remember you’re dealing with people. The impact of being made redundant will vary largely from person to person, depending on their unique circumstances. In my line of work, I’ve seen a range of responses from employees. I’ve known some people to take their redundancy as a sign to start the business they’ve always dreamed of, while others are left in shock……often not only by the job loss but by the way it has been handled. Provide whatever support you can to employees, including career transition / outplacement services – it is so valuable for these individuals to have that confidant and experience of someone who understands “Careers” and “Transitioning”.

Follow legal requirements

It’s important to follow all necessary legal requirements throughout the process. This includes providing notice and consultation periods and following fair dismissal procedures. Keep in mind, requirements will vary from organisation and location. When in doubt, seek legal advice.

Consider the long-term impact on the business

While redundancies may be necessary, they will have an impact on the company. Employers need to be as clear as possible about potential knock-on effects. And don’t forget the remaining staff – the impact can be huge! Invest time in them! Schedule conversations with people to gauge how they are feeling about the situation and set their minds at ease (if appropriate). Additionally, understand the skills shortages that are impacting your company and do whatever you can to ensure current and future employees can fill those gaps. As mentioned earlier, things can change quickly in terms of the economic and business landscape, so have a plan that sets out how to rebuild your workforce in the future if that’s on your strategic radar.

In my next article, I’ll be looking at redundancy from the employee’s perspective.

OnTalent’s Managing Redundancies with Dignity white paper investigates how the treatment of departing employees can impact an organisation’s financial viability. The white paper highlights key strategies that will help to ensure the dignified treatment of your employees as they face redeployment or retrenchment from restructuring.