Employers should always attempt to avoid redundancies, for example, through natural wastage; recruitment freezes, stopping or reducing overtime, retraining, redeployment, or offering sabbaticals and secondments.
But once the decision to downsize is taken, they need to consider carefully how they handle redundancies and ensure they retain their most talented and effective employees. It is critical employers use a fair and objective process to determine who to retain and who to make redundant.
This way organisations can be confident they will be able to accurately identify who is performing against expectations and who is not. The importance of basing decisions on objective data cannot be underestimated. Instances of legal action against employers are becoming more common, with approximately 36% of employment-related legal challenges made by current employees (Robertson & Smith, 2001).
To avoid costly litigation, they need to be clear about the key skills and behaviours required for successful performance in the role. These should then be used as a basis to determine the employees who can match the criteria required for the future success of the business, through competency-based behavioural assessment processes.
By measuring each competency many times, organisations can build a picture of which individuals possess the expected level of competence. This data can be combined with additional job performance data, so decisions about who to make redundant are based on a solid foundation of evidence that is comprehensive and defensible.
Employers must make sure that they record and retain all supporting documentation. Under the Freedom of Information Act, individuals can request access to such documentation and organisations are obliged to provide this. More importantly for organisations, it is their responsibility (not the employee's) to prove that they were fair in their decision-making process. All too often, employers lose industrial tribunals because they are unable to provide adequate documentation to support their decisions.
A key part of any redundancy process is communication. Redundancy is one of the most traumatic events an employee may experience. By adopting an objective process and communicating this clearly to all employees, organisations can be more confident they will retain the most effective employees, maintain staff morale and avoid costly litigation cases from exiting employees.
Giving notice to individual employees is unpleasant and needs to be handled carefully. Individuals can be badly affected by redundancy and need support to accept this and mount an effective job search.
Feedback from employers gives those exiting the organisation valuable insights into their key strengths and development areas and will help them to find future employment. A well-designed redundancy programme should enable employees to refresh their interview skills, redraft CVs and reply effectively to job advertisements.
In any redundancy situation, the immediate priority is the fair and sensitive treatment of employees who are losing their jobs. Once this has been achieved, the organisation's ongoing effectiveness is largely dependent on the morale of the survivors. A demoralised workforce, anxious about job security, will not display commitment, enthusiasm and initiative. Ensuring engagement for those that stay is therefore hugely important for business success.
Giving such individuals stretching goals and access to developmental opportunities will help to ensure that top talent continues to develop and stay motivated and engaged. This investment in building skills and organisational capability will put organisations in a stronger position as the economy recovers.
In these turbulent times, employers inevitably have to downsize in order to survive. But by ensuring that the redundancy process is fair and objective, they can retain their most productive employees. Providing support to those exiting the organisation as well as developmental opportunities for those that remain will help keep the workforce motivated and engaged, so that they make a positive difference to the future of the organisation.
Sophie Pritchard is senior consultant, Assessment & Development Consultants
