Managing redundancies: trade secrets

With cash-strapped firms announcing spate after spate of job cuts, senior HR professionals can expect to find themselves delivering redundancy programmes at a scale and speed not seen in more than a decade.

Apart from the daunting task of deciding how best to retain critical business skills and what criteria to use without generating unfair dismissal claims, the most difficult challenge is, perhaps, keeping everyone motivated throughout the uncertainty of change and helping leavers to find new work while at the same time achieving re-engagement from disenchanted survivors.

Breaking the news

When announcing redundancies, create a clear and consistent message to relay to staff and bear in mind that the reaction of most people will be to panic and assume it will affect them. To prevent valuable skills and knowledge flooding out of the organisation, ensure any planned financial retention arrangements and career transition support is communicated at the same time as news of job cuts.

Explaining the process

Clearly explain the business reasons behind the decision to make the redundancies, the selection criteria to be used, the timelines involved and severance arrangements.

Communication should be formal and regular, whether delivered via news bulletin or face-to-face. Even if you have little to say, say it. For example, if you’re hoping to generate enough voluntary redundancies, but aren’t yet sure if you will need to make compulsory redundancies, far better to say a decision has yet to be taken and when it will be made, than nothing at all. Any silence is likely to be interpreted as the worst-case scenario, impacting negatively on morale and productivity.

Ensure line managers and supervisors are briefed in advance and given support to prepare for the questions that they will be asked. Provide coaching where possible, so that they are equipped to discuss the announcement and deal with any emotional fallout.

Maintaining performance

While most redundancy packages or compromise agreements might be enough to keep people in their roles until the cut-off date, it won’t be enough to keep them motivated to perform. To prevent a major dip in customer service and productivity, try and make anyone selected feel like it’s an opportunity to move onto better things – not the end of their world. Providing a budget for career counselling, to help individuals think about and plan their future, will prove a sound investment.

Supporting leavers

Support to help employees secure a new future can range from providing access to valuable resources during work time, to bringing local employers or recruitment agencies on site to advertise current vacancies. You might also consider running CV-writing and self-employment workshops or work with a dedicated outplacement provider to offer one-to-one support and keep their job search on-track.

The benefits to the business, in terms of reducing the cost of lost productivity, will more than outweigh the costs. It will also send a very positive message to remaining employees should they fear redundancy in the future.

Working with unions

The normal reaction of the unions will be to resist any loss of employment and challenge the selection criteria. Your role is to recognise that union representatives are just as, if not more, likely to be approached by employees seeking reassurance about their future. Therefore, involve them in the briefing process and provide them with the same information and support to answer employees concerns and worries as managers. By giving union representatives an opportunity to access information and become a part of the support process, you will help them to help address any employee concerns or worries.

Case Study: Royal & Suna Alliance (RSA) helps leavers move on

When insurance giant Royal & Sun Alliance (RSA) decided to consolidate its broker business and transfer policy operations from Leeds and Hertford to other sites, it was essential the decision to tell employees over a year in advance didn’t impact on customer service.

Russell Shaw, HR director, explains: “With such a long lead-time, it was essential that we didn’t just retain employees until the cut-off date. We also wanted them to feel reassured about their future so they would continue to deliver excellent service.”

With 270 employees due to be made redundant across both sites, the company needed to find a way of keeping employees motivated and productive. Critical to this was helping as many people as possible to find new work. Shaw enlisted the support of the career management consultancy CMC to help design a programme of activities to maintain morale.

“Within two weeks, CMC had conducted personal meetings with all the employees facing redundancy. This looked at career options that could better support their life outside of work and any obstacles to new employment,” says Shaw.

Face-to-face coaching was provided and supplemented with workshops and drop-in sessions on everything from career planning and self-employment to acquiring new computer skills.

A dedicated area, away from the usual workplace distractions, was set up for employees to focus on their job search and access a live database of career vacancies resulting from contacts made with local employers and specialist recruitment agencies. CMC consultants were also on hand to help employees adapt CVs to specific opportunities, analyse job offers and bolster confidence after any rejections.

“We simply couldn’t have predicted how each individual would cope,” says Shaw. “Some people were able to use their own networks to find a new job quickly, while others required extensive help. Our career transition provider’s flexibility and willingness to provide extra support to individuals as and when needed was exactly what we required.”

Within one month of closing, 92% of the departing employees had been resettled into new employment, enabling RSA to deliver a seamless handover with no disruption to customers.

Top Tips

Plan ahead

Although pressure to make quick job cuts may be intense, step back and think about how best to retain business critical skills and people, without incurring unfair dismissal claims.

Set a timeline

As far as possible, create a clear timetable of events and stick to it. The more clarity you can provide during this time of uncertainty, the less people will be prone to panic.

Support managers

Brief line managers and supervisors ahead of making any announcements and help them to develop answers to any questions they anticipate being asked by employees.

Provide reassurance

Don’t assume that those employees not directly affected by redundancy won’t take fright and take flight. Encourage the senior management team to reassure critical people.

Engage survivors

Maintain regular communication with employees across the business after the exercise is complete, to address concerns about their role and the future of the company.


Our expert

Robin Wood is the founding managing director of Career Management Consultants (CMC). For more than 18 years, he and his team have helped HR professionals put in place the strategy, communication, coaching, career transition and employee engagement services required to maintain business performance during restructuring.

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