Staff morale in decline as redundancies soar

More than half of employers have noticed the damaging impact redundancies are having on staff morale, according to a recent survey by Personnel Today’s sister organisation, pay specialist IRS.

The survey, which looked at the redundancy management processes of 266 organisations, found that 58.5% of respondents had seen an adverse effect on the morale of remaining employees. And they also noticed another negative side effect – the loss of ‘organisational memory’, cited by 28% of employers. However, on the upside, 28.5% noted an increase in productivity.

The single most important factor taken into account when selecting individuals for redundancy was their skill/competencies, cited by 32.8% of the respondents. More than a quarter (29.3%) said that no single factor was of particular importance, and all reported that at least two factors were considered when deciding who they should make redundant.

Legally, employers planning to make collective redundancies – where 20 or more staff are to be made redundant at one establishment within a period of 90 days or less – are required to consult with representatives of the affected employees beforehand. They should also consult the employees individually.

Almost all respondents (95.1%) involved line managers in the consultation process, with the same proportion involving HR. Trade unions were consulted by 38.5% of the respondents. And 81.1% actively involved the affected individuals themselves.

In terms of statutory redundancy pay, most employees who have been continuously employed by an organisation for at least two years are entitled to:

  • Half a week’s pay for each year of continuous service below the age of 22

  • A full week’s pay for each year of continuous service between the ages of 22 and 40

  • A week-and-a-half’s pay for each year of continuous service over the age of 41.

A maximum of 20 years’ service can be taken into account when calculating statutory redundancy pay. And the new limit on the amount of a week’s pay that can be considered – which came into force on 2 February – is now £350 a week.

Just over half of the employers surveyed (52.3%) offered redundancy terms beyond the statutory minimum. More than two-thirds (69.4%) do not cap the overall amount an employee can receive as redundancy pay. And almost three-quarters (71.4%) provided outplacement or other support services to workers losing their jobs.

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