BrewDog hit the news recently when they announced redundancies for their employees via a 15 minute telephone call. There are much more fair, kind and better ways to handle redundancy and I cover the whole subject in more detail in my award-winning book “Redundancy with Love: Getting it right for your people and your business”.
Going back to basics
It remains a painful fact that many businesses are currently facing up to the difficult decision to make some of their employees redundant. This is nothing new, but the levels of redundancy in UK seem to be high at the moment as we face ongoing economic uncertainty and global volatility causing disruptions to trade.
With this background, it seems sensible to go back to basics and consider what alternatives there might be to announcing redundancies and losing valuable employees. Streamlining your workforce might feel like a sensible strategy for survival now, but it won’t help you to thrive and grow in the longer term.
Redundancy is not always the best answer and it is worth looking at the advantages and disadvantages of some of the alternative options.
What alternatives are possible?
First of all you will need a thorough understanding of your business financials to assess whether redundancy is the only option. Maybe other cost reductions might be possible, to mitigate the need for redundancy (or at least to save some jobs).
Here are some ideas for you to consider:
- Are there any other roles within the business that those who would face redundancy could fill?
- Can you implement a recruitment freeze? It seems perverse to be recruiting while you are letting staff go elsewhere.
- How can you maximise staff flexibility?
- Can any of the work be adapted or dropped (even temporarily)?
- Can you recycle, reuse or repair furnishings, equipment or tools instead of renewing them?
- Can you make reductions in costs such as non-essential travel, company vehicles, subsidised cafeteria, etc.?
- Are there any grants or incentives available from the government or elsewhere?
- Can you limit the number of contractors and agency staff you are using?
- Could you offer your employees an option similar to the government’s furlough scheme during the global pandemic?
- Other options might include offering sabbaticals, reduced working hours or days, salary reductions, secondment or redeployment opportunities.
If you get creative, you might think of other ideas to avoid some or all of your redundancies.
Capping senior salaries
Any company’s wage bill is likely to be a large – if not the largest – portion of their spending, which is why redundancy is often seen as a good way to cut costs.
If you can cap your highest salaries, this might save some jobs lower down the salary scale. Of course, this may be difficult to implement and, of course, it won’t be popular (at least with those senior staff) but it is an option that it is worth considering before you need to make people redundancy.
Collaborating with your staff – and your competitors
The most important consideration is to consult with your employees. They can often see things in a completely different light from managers and company owners and come up with suggestions you would never have considered. No matter how well you know your staff, you might find that they surprise you. Consulting with your staff can bring unexpected suggestions and help them to come to terms with the need to look at cutting staff numbers.
If you are a small employer, you may think that none of these alternatives is possible for a business of your size. Have you thought about joining forces with your competitors or other small businesses in your local area? If other businesses are facing similar struggles, you might be able to pool resources and even share employees.
In conclusion
While some of these alternatives might not seem viable for your business, it is always worth giving everything some careful consideration.
It can be helpful to think laterally about a problem. There may be nothing you can do in practical terms but if you can show that you have considered every possible angle, your employees will accept the inevitable more easily and your reputation as an employer will remain intact.
