5 questions to ask when you’re considering redundancies
Right now, life as an SME is tough. The stark reality of constantly moving goalposts combined with the uncertainty of where the pandemic will take us next has inevitably left many businesses looking at how they might streamline their workforce.
And with the furlough scheme that has helped thousands of companies to retain employees set to end on the 31 October, even the support of the replacement Job Support Scheme will, unfortunately, still leave many businesses having to consider letting people go.
But, with a recent poll of 2,000 people by YouGov revealing that 33% of SMEs are unaware of their legal responsibilities around consulting staff before making redundancies, it’s more important than ever that your business understands the complexities of the process.
Here are five questions you need to ask yourself when considering making redundancies:
Is this redundancy the last resort?
Although never a pleasant route to take, redundancies are often seen as the go-to option to help cut costs. The fact is, from a legal standpoint, redundancies should always be the last resort after following a clearly defined process. The process follows a strict legal framework which considers factors including an employee’s length of service, the alternatives to redundancy, conducting a ‘fair and objective’ selection process, and establishing consultation periods with your employees.
Taking HR advice to ensure your company sticks to this framework is crucial if you are considering redundancies and will help you avoid issues such as claims for unfair dismissal.
Can I demonstrate fair selection criteria?
The criteria you use for selecting employees for redundancy should, as far as possible, be based on objective criteria. You should not base your choice on purely subjective factors, such as which employees you like the most or who you’ve known longest. As part of the process, you need to be able to explain the basis for your selection and how the attributes of the employees you have chosen to retain match the future requirements of the business.
If you wish to make several redundancies, you need to create a clearly defined ‘pool’ of employees to whom the selection criteria will need to be applied and selections for redundancy made.
Expert HR advice will help you define pools and selection criteria to mitigate risk to the business during the process.
Am I/my team equipped to handle the emotions involved?
Right now, everyone’s emotions are heightened as we tackle one of the biggest challenges many of us are likely to experience in professional, and personal, lives. If the redundancy process wasn’t hard enough already, the current climate adds further emotional pressure for everyone involved.
Knowing how to conduct and handle difficult conversations as part of the redundancy process is crucial, and if you’re not confident when you head into those meetings, emotion can quickly take over. Having the support of an experienced HR professional by your side will help to make those difficult conversations that little bit easier while ensuring you stay on track and balance your legal checklist with a caring, compassionate conversation.
Have I built in time for conducting the process remotely?
Planning is crucial when it comes to the redundancy process, and with many of us working at home, you need to factor in additional time for telling people remotely as opposed to face to face. It is often much more difficult to deliver a message or portray emotion via a video call, phone call or email, so conversations may take longer and require more of your time to ensure your employees understand their position.
Working with a HR expert will help you plan effective timings for a redundancy process and ensure each employee is treated with kindness, respect and dignity along the way.
Is there an alternative to a redundancy?
As an employer, you must explore and exhaust all possible alternatives before making a person redundant. But what are the alternatives? An employment law expert can help you explore the feasibility of reduced working hours for the roles you may feel you need to make redundant, for example. This means employees may be able to work reduced hours now if your company has seen a decrease in demand, however, there are legalities you need to adhere to in this instance, such as not unilaterally changing a fundamental term in a contract of employment.
You may also consider suspending bonus payments to ease pressure on finances, but you must consider legalities such as where an employee has a contractual entitlement to a bonus for example, as, if you suspend it, you could be in breach of contract.