5 ways to manage redundancy effectively
As business managers it’s important to remember that mismanaged redundancies can be equally as damaging to your company and employer brand as they are to employees. Over the years I’ve seen many companies struggle to recruit new talent based on poorly handled HR situations in the past.
Redundancy is never going to be easy but experience has shown me that with careful planning and the right communication between the employer and the employee, it does not have to be an awful experience for either party.
Where budget permits career counselling or outplacement programs are a fantastic option as they assist redundant staff in gaining alternative employment and protect your employer brand in the eyes of your clients and remaining employees.
Most importantly for SMEs it’s about acting within the law and with respect to your employees. Whether it’s providing emotional support or job search assistance, employers can go a long way to ensuring former staff can move on successfully and confidently after the redundancy.
Below are my Top 5 Tips on Managing Redundancy Effectively.
1. Investigate all alternatives
- Redundancy should always be the last resort; Consider converting staff from full time to part time employment, reducing or freezing salaries or bonuses, encourage the employee to take accrued annual leave. Redundancies can be expensive so do not always deliver the short term gains anticipated.
2. Ensure legal compliance
- Confirm the employee’s redundancy entitlements by looking to your relevant award, employment agreement, company policies and legislation.
- Employee’s must be notified of redundancy in writing.
- Redundancy packages are taxed at a lower rate, so speak to your Accountant.
3. Keep communication open
- Inform the staff member what is to happen next. Will their computer be switched off? What time must they leave the office?
- Advise remaining staff of the news of redundancy and how their future job security may be affected.
- Ensure those who are delivering the ‘message’ of job cuts have specific training on how to have the conversation and how to handle the range of employee reactions.
4. Offer the employee a career transition program
- Where the budget permits, outplacement services will allow employees to move on quickly and secure new employment.
5. Be considerate
- If the employee has a company car, don’t forget to organise an alternative means of transportation – don’t leave them stranded.
- It is the position and not the person that becomes redundant, ensure that the staff member effected by redundancy and the survivors are aware of this.
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Tina, all great points! In addition to your thoughts under #4, it\’s key for these businesses to start investigating affordable alternatives to traditional transition programs. The expense of traditional outplacement services alone makes it prohibitive to offer the program to all employees. The top request of transitioning employees is access to current technology that will help them better market themselves to prospective employers. Employees at all levels need to have a \”personal brand\” on the web, so they can be linked to social networking sites like LinkedIn, Facebook, etc. Businesses need to re-evaluate how they spend while separating employees. Are traditional services outdated? Under utilized? In need of technology? All good questions!
Traditional outplacement firms haven\’t faced much competition in the marketplace, and many businesses utilize them because they\’re not aware that other options exist. The business is changing. It can be damaging for a company\’s brand to have existing employees leave without a sense of goodwill. It\’s also unnecessary! it\’s time for businesses to explore other options and demand more current technology from their career transition providers.
Thanks Aimee. I agree, that the job search process is now more about how well you fully utilise techonology. Gone are the traditional days where we would search for a job in the paper. In fact the careers section of most newspapers have been rapidly declining over the past few years. Our consultants, do talk with clients about incorporating technology into the job search function when managing career transition programs, but I think there needs to be greater emphasis on this as you say. Thanks for your comments.
Hi Aimee and Tina, I think you raise a good point Aimee. In the past, I have always simply paid for the services of an outplacement program with any redundancy, but with current cost-cutting initiatives, on of our ways to reduce costs has been to offer this service in house. We now provide a tip sheet to all redundant employees pointing them in the direction of the best technological resources for sourcing employment, relevant recruitmet agencies for them, and tips on making themselves more employable. We also follow up weekly for a period of 3 months or until the employee finds alternate employment assisting them in any way we can. We also notify them weekly of internal opportunities arising within the company in the hopes of employing them back in the near future (win/win for both employer and employee). I’ve found the ex-employees really appreaciate this ‘added service’ and it makes the transition process so much easier for them, and also helps our employer branding (in the sense of word of mouth from outgoing employees) and possible future re-hires, as the employee feels like they were ‘looked after’ by the Company during their period of transition.
My position was one of those made redundant less than a year ago, and it was very painful. Because, we could not even send an email to our colleagues to say bye (Network login rights were taken away), and had to leave on that day. I just wanted to disappear immediately from that place. Also, recently, the company placed ads for the same positions without notifying those let go.