· Features

Redundancy – why it pays to plan

Making employees redundant can be stressful for everyone. But planning ahead really can make a big difference

Redundancy - the very sound of it is unpleasant, let alone the job of having to carry it out. For those who have been though the redundancy process it’s likely to stir up a wave of emotions. It’s hardly surprising that many businesses prefer not to think about it at all. When it does happen, many companies are completely unprepared for how to handle the stresses it brings. Which is probably why there are so many horror stories around redundancy: from workers being let go via text or even reading about it online before they find out in person, to individuals being asked to travel 200 miles to attend their redundancy consultation.

From a PR perspective this can all be hugely damaging to a company’s reputation. Let alone the thoughts of those employees who may still be working for the company. Then there are the potential legal implications of the poor handling of redundancy. Tribunal cases involving redundancy have risen by 45,000 cases since 2017. This adds legal costs to the reputational damage done by the poor handling of redundancy.

It doesn’t and shouldn’t have to be that way. Yes, there are sudden business collapses, not least in retailing. Even if it does come out of the blue, it’s still something which can, like most things in business, be planned for in advance. Whatever the eventuality - from sudden changes in the marketplace to mergers, acquisitions or office closures, these are all events that you can prepare your people for.

Not only do you avoid the reputational impact of mass redundancies, but there are other benefits to be had by having contingency plans. Can you, for example, redeploy some of the staff to other roles? Is it possible to retrain experienced staff with the skills to fulfil other roles? These solutions can be far more cost effective in the longer term than paying redundancy.

By planning ahead, and having contingencies in place, you can find ways to limit the financial and emotional impact of redundancy on your business. Offering support to those employees facing redundancy can make a significant difference to the new lives they are facing, but also demonstrate to existing employees that you care enough to manage the inevitable challenges that being in business brings. Redundancy may never be an attractive word in anyone’s vocabulary, but by planning ahead it needn’t be the nightmare which every HR team dreads having to deal with one day.

In the next article, appearing on the 16 March, we’ll look at why providing outplacement support can bring significant benefits when redundancy is the only option. In the meantime, to find out more about how you can plan and manage redundancy, download your free copy of the LHH Best Practice Guide for Making Redundancies.

CathyAnn Hernandez is marketing manager, UK and Ireland at LHH