- September 25, 2023
- Posted by: Hannah Ingram
- Category: HR Advice & Support
Explores 8 redundancy alternatives – It’s no secret that some sectors are struggling right now. Companies are coming under increased pressure from the cost-of-living, inflation and trying to stay competitive on salary.
Meanwhile some businesses grew significantly during the tech boom of the pandemic and are now facing falling demand.
Sadly 30% of employers are predicted to make redundancies in the next 12 months and with firms of other 250+ employees most likely to consider this.
Whatever the reason, redundancies are traumatic for everyone involved. What’s more they have further repercussions in terms of increasing your employee turnover and making your current employees concerned about their own job security.
Therefore, companies are looking at alternatives to redundancies at an early stage.
Here’s 8 alternatives to redundancies to explore:
1. Moving job roles
This can work with sales territories for example where demand has fallen in one location but not another. Or in recruitment services where there is less demand for a certain job type whilst others are booming.
Moving job roles will likely require some training and development and you need to ensure the employee(s) affected are on board or it’s unlikely to work.
What’s more you need to consider if the workload will be high enough. As you’re effectively creating a new position you don’t want to move an employee from one redundant position into another.
2. Job sharing – part-time
This one can work particularly well if there are members of staff who would like to move to part time anyway. It also allows the person whose hours have been reduced to see if this arrangement will work long term.
If they choose to move on, then it’s then by their choice and you only need to refill a part time role or save some money.
Equally the market could recover over time, and you can then restore the position to full time.
3. Furlough or Sabbatical
These work well where a fall in demand is due to a temporary market dip caused by external factors.
Furlough became mainstream during the pandemic keeping employees afloat. Whilst preventing businesses from choosing between going bankrupt or laying off staff with little chance of them securing alternative work.
Offering a sabbatical as unpaid time off or at a reduced rate can also be particularly useful if you have someone highly skilled and they also have tacit knowledge that is important.
In these circumstances it’s important to set down ground rules for whether they can work elsewhere during that break. Therefore, it’s crucial to work closely with HR to ensure everything is above board and there is no confusion.
4. Restricting overtime pay
Overtime pay allows employees to reap the benefits of overtime whilst giving employees extra work hours without the need to hire a new position. It also shows employees that working outside of normal work hours is something that they don’t expect for free.
However, overtime can become a big overhead. In times of recession large companies have been known to restrict this.
The downside is it may cause employees to look elsewhere if others in your industry still offer overtime, those who regularly rely on overtime will effectively be taking a pay cut, however it’s a far less drastic measure than redundancies.
5. Voluntary redundancies
This works particularly well in big companies, by providing employees with a choice you can often find enough people who are happy to retire early or take a pay out and look for work elsewhere. This takes the heartache out of forced redundancies.
However, do be aware that by publicly announcing voluntary redundancies you are showing your hand for what may have to come next so ensure your internal communications is transparent and clear.
Also ensure you are considering all of your overheads, if the voluntary redundancy letters go out and you just sent your sales team for a 2-week inclusive trip to Hawaii, questions will be asked.
6. Flexible working requests
In entertainment and retail sectors it can be the norm to ask who wants to go home early on quiet days, or calling people back in for busy periods.
By offering flexibility to your staff you can give them the choice to scale back on their work whilst saving some vital pennies in your budget. Or remove the cap on holidays so people can request unpaid time off.
The important thing here is to have some control over these requests, so you aren’t flooded with people being off leave gaps that disrupt operations or customers.
7. 4-day working weeks without full pay
You can introduce initiatives such as 4-day working weeks, but which aren’t on full pay (be crystal clear when you communicate this to your team!). Just be aware that not everyone has the luxury right now of taking a pay cut and therefore again choice where possible might be your best option.
8. The importance of HR and payroll
It’s important to work closely with HR and outsourced payroll (or your in-house team) to ensure these decisions make commercial sense and are legal. Your HR team can help ensure you remain compliant and flag any HR challenges which may arise.
Equally payroll have the right data at their disposal to allow you to forecast the financial changes resulting from these initiatives to check they are viable.
Getting the right support
Facing financial difficulties places a huge burden on teams and leaders. Uncertainty can break trust between teams and their managers reducing productivity, job satisfaction and further escalating the problem.
No-one likes to think about redundancies but by getting HR advice and support early in the process you have more time to explore all the options available to you.
Did you know that Talk Staff offers HR Advice & Support?
Our dedicated team partners with businesses across the UK to ensure that not only are they remain compliant, with the latest documents and policies, they also have access to the help and support of experienced individuals with expertise of tricky and complex situations that only HR knows well.
If you’d like to find out more about this service, then please click here
Last Updated on 7 months by Hannah Ingram
