Legal risk and the prospect of employment tribunal claims are the main concerns of organisations when making redundancies, not the loss of skills.
New data from HR and employment law specialist WorkNest found that more than half (54%) of organisations say their main area of doubt when making a redundancy is “legal risk and potential tribunal claims”.
This was significantly higher than worries about the reputational risk to the business (4%), the financial implications of redundancy payments (5%) and the loss of skills within the company (9%).
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Many HR professionals also said they had fears over the impact on workplace culture after making redundancies. More than a quarter (27%) said that the repercussions of job losses on the remaining employees’ morale and productivity was their primary concern.
Ensuring compliance with the legal process when making job cuts was also found to be the most stressful part of making redundancies (27%) – with stress fuelled by the fear of legal action. The same number, however, (27%) reported that supporting employees emotionally was actually the toughest part of the process.
Peter Holmes, senior employment law adviser at WorkNest, said: “Our data shows that, currently, the main reason businesses will need to make redundancies is to cut costs.
“However there’s many reasons businesses may look to make redundancies including restructuring or trying to future-proof the organisation. Whatever the reason, it’s a difficult process for everyone involved and brings with it a broad spectrum of concerns as highlighted by our research.
“Getting the correct advice and support is key to easing the stress and worry of a tribunal threat, especially in more complex redundancy situations. The correct processes, support systems and investing in line manager training are good ways to try and minimise the impact job losses have on remaining employees.”
About 500 HR professionals were polled by WorkNest.
Fears over a rising tide of redundancies have been raised because of the rise in employers’ national insurance from this April.
The financial risks to firms of getting redundancy processes wrong are set to become greater. The government has confirmed it will table an amendment to the Employment Rights Bill to double the maximum protective award from 90 to 180 days’ pay where an employer fails to comply with collective redundancy obligations, for example, in fire and rehire situations.
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