Managing Redundancies: A Step-by-Step Guide for Leaders and Employers

2020 has come and gone but the end of COVID-19’s impact to the global economy is nowhere in sight. As the world continues to undergo a restructuring of sorts due to the pandemic, companies across the globe are now, more than ever, facing redundancy issues within their organisations.
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Managing Redundancies: A Step-by-Step Guide for Leaders and Employers

  • As an employer or business owner, you are responsible for the legal, financial, emotional as well as mental ramifications of the layoff process.
  • Don’t underestimate the amount of planning and preparation it takes to perform a good redundancy program.
  • Taking a people-centred approach to redundancy management can result in better outcomes for you, your business and your workforce.

2020 has come and gone but the end of COVID-19’s impact to the global economy is nowhere in sight. As the world continues to undergo a restructuring of sorts due to the pandemic, companies across the globe are now, more than ever, facing redundancy issues within their organisations.

As an employer or business owner, you are responsible for the legal, financial, emotional as well as mental ramifications of the layoff process.  In this article, you will discover our people-focused, pragmatic approach on how to handle redundancy as an employer.

What is a redundancy process?

Generally, a redundancy or layoff is an involuntary termination of employment where a job or role is no longer required. Redundancies are usually caused by factors, such as changes in economic conditions, business efficiencies or technological advancements.

A redundancy process, on the other hand, is the systematic approach to reducing roles as an organisation undergoes restructuring. Taking a people-centred approach to redundancy management can result in better outcomes for you, your business and your workforce.

💡 When crafting your own redundancy plan, consider these three things:
  • How to treat the impacted employees with respect and dignity
  • How to deal with the legal ramifications of the procedure
  • How to proceed with the eventual restructuring of the business

Benefits of a well-planned redundancy process

When businesses began taking a hit on revenue due to the COVID crisis, HR leaders and employers scrambled to scour the web for a comprehensive redundancy guide. Unfortunately, nothing of real value existed. If anything, they either had to rely on blogs or pay thousands of dollars on consultancy fees. 

This is exactly why The People Shift was created. An award-winning HR consultant and a leading voice in the redundancy and transition space,  Jamie Getgood believes that having a well-planned, people-focused redundancy program can help:

  • Mitigate legal issues
  • Protect your brand
  • Support your leaders
  • Enable dignified exits
  • Minimise business disruption

In the succeeding sections, you will find an overview of The People Shift’s internationally acclaimed redundancy program.

What is the best redundancy process to follow?

The People Shift’s Pragmatic Redundancy Process

Caption: Overview of The People Shift’s pragmatic redundancy program.

The best redundancy process to follow should include the following phases: 

Strategic Business Assessment and Approval

  1. Inspect the current state of your business / organisation.
  2. Develop a map of your business goals and strategy to get a clear vantage point.
  3. When working for a larger organisation, investigate if you are eligible to run the redundancy. If you belong to a smaller business, understand the impacts on your budget.
  4. In some cases, running the redundancy requires other corporate members.

Workforce Planning

  • Analyse your talent against your current goals.
  • Consider the future and the skills and experience you have to meet your future strategy.
  • Identify the gaps in your workforce and assess the external market.
  • Determine the solution that suits your needs and understand if redundancies are required.

Legal and Consultation Assessment

  • Assess legal requirements and ensure you know your obligations under the law.
  • Assess Industrial Relations/Employee Relations Risks and Union consultation or collaboration requirements under any enterprise agreements.
  • Ensure that the people involved sign confidentiality statements and understand the implications of breaching these.

Employee Assessment/Selection and Redeployment Review

  • Determine if you even need to run a selection process. If your redundancy program involves reducing the number of people performing the same roles, then the answer will be yes.
  • Carry out a sound assessment process—include evidence requirements, relevant training for leaders and assessment procedures.

Redundancy Process Development

  • Develop a redundancy and exit process, considering the most dignified approach for impacted employees.
  • Develop templates, tools, scripts and training that may be required to ensure consistency and professionalism of your program.
  • Using scripts to support all redundancy meetings will ensure conversations stay factual, objective and free of bias.

Redundancy Exit Process

Distribute communications to all relevant stakeholders in line with your communication plan. Consider the following:

  • Appropriate Dates and  Venue
  • Communication to Employees
  • Structure of Meetings
  • Employee Support
  • Exit Checklist
  • Government Notification

Rebuilding Culture and Supporting Employees

  • Communicate to the workforce about the end of the process
  • Acknowledge and honour those that left and create opportunities for people to talk
  • Monitor individuals to ensure mental health is intact—be aware of survival guilt
  • Coordinate employee assistance program (EAP) or mental health support. Initiate engagement activities over the following weeks

Rethink

As Jamie Getgood said, redundancy is a profound moment in time wherein you could dramatically change people’s lives. Make sure you impact your employees’ lives in a positive light, even as they exit your business. 

Our mission is to help you.

The People Shift supports HR teams and business leaders in creating and managing well-planned, dignified and people-focused redundancy and transition processes. We aspire for all employees to get a fair and equitable process so they can transition successfully and remain powerful brand advocates for the companies they were once part of.

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