Redundancy - The People Aspect

Redundancy Part 1– Managing the People aspect of Redundancy

As the country is slowly easing out of lockdown, those leading organisations, whether small, medium or large, schools, voluntary sector or not for profit, are all facing some of the hardest decisions they will ever make.

In 6 months, many have gone from leading financially stable organisations with good profit or surplus levels, with a strong ethos, product and service with a bright future to organisations that are now seriously struggling.

Their high performing teams have stepped up to the plate in the last 6 months, either working remotely, delivering a full school timetable, being the only people in the office, still interacting with their customers in a face to face environment, or taking furlough, when all they wanted to do was help.

Now the organisation’s pipeline, new pupils, new service users, has dried up, and even with a ‘V’-shaped recovery model, it is difficult to predict the future. This may mean the possibility of redundancies. How do we balance the need to see the bigger picture, the greater good of the whole organisation against the cost of a smaller number of redundancies?

In this article I am going to discuss

1)   What else can we do before redundancies?

2)   The importance of - the need for an honest, open and transparent approach.

3)   How to look after those being made redundant.

4)   How to look after the survivors when you come through the other side.

It is important to note, that there are strict employment law considerations when making redundancies and no matter what your knowledge or experience, seeking legal advice is a must. Especially at the moment where the whole furloughing process has added an extra level of complexity, to what can already be very confusing.

To confirm what redundancies are, before we go any further. According to the CIPD, in the UK an employee can be dismissed under the term redundancy if

·      The employer has ceased, or intends to cease, continuing the business, or

·      The requirements for employees to perform work of a specific type, or to conduct it at the location in which they are employed, has ceased or diminished, or are expected to do so.

When the organisation then finds itself in a situation where they can not afford to maintain the headcount cost they have, even with furlough support, or after the furlough programme has come to an end, reducing these costs through redundancies becomes an option. However, what else could they have tried?

1)   What else can we do before redundancies

As leaders we often hold such decisions within our leadership team, believing that it is our responsibility to solve the challenge we are facing. However, if the virus has taught us anything, it is that we are in this together! This means that we should consider being more open with the workforce at all levels, and explaining where we are, what we need to save, and the options of how to do that. These options should include :-

·      Reducing people’s hours,

·      Reducing hourly rates,

·      Not replacing other staff who have already left,

·      Recruitment freeze,

·      Overtime freeze,

·      Early retirement packages,

·      Retraining or redeployment opportunities,

·      Offering the opportunities or sabbaticals or secondments.

These all come with their own complexities, implications to employment law and the need for consultation and discussion, however there are cases where organisations have involved the whole staff in making such decisions, and found a willingness to go through short term pain to maintain their jobs and the organisation in the long term. 

If we open this up to the teams we work with, they become part of the decision-making process, and that can change the psychological perspective of the redundancy process being ‘done to them’. It does not mean that they will always find the solution, it is an opportunity to see what else can be done.  It isn’t about shirking our leadership responsibility either, however it is treating our teams as adults.

2)   The Importance of Communication

I am sure many of you have heard the old saying

“Tell them what you are going to tell them, then tell them it, then tell them what you have told them”

This is very true, and we must not underestimate the importance of staying in contact with everybody.  We all know the power of the grapevine; this fills a void that the lack of frequent, honest and open communication can leave. Being transparent about what we are doing, why we are doing it, and how we are going to do it, along with a timescale, enables staff to understand the impact that this has on their personal lives, and start to react accordingly e.g. not moving house, not changing their car, not booking the holiday of a lifetime for next year, or alternatively brining forward retirement by a year.

Initially it is important to have a plan for this communication, which starts before we have any discussions around the alternatives mentioned in point 1. 

We also need to remember that different personalities need to be communicated with in different ways. It is not acceptable to say one size fits all. We can consider doing the following:

·      A whole staff communication, either face to face with social distancing, or using technology. Make sure that those people without computers are spoken with at the same time as the main communication occurs.

·      Support this with a written communication to everyone.

·      Ensure one-to-ones are set up to let people talk this through on a personal basis.

From a style perspective, ensure that you do consider

·      high level messages,  

·      the impact on people,

·      detailed aspects of the plans, and

·      timescales of the various steps.

Your staff can choose what they listen and read at different stages, and you will repeat the message time and again, be patient this takes some getting used to, and you will have been working on this plan for several weeks before you have told them about it, they need to catch up. 

Also remember that people will react differently:

·      Some will want to discuss it straight away and try to solve immediately.

·      Some will question why, where as others will accept initially and question later.

·      ‘After all I’ve done for this organisation’ will be a phrase you will hear time and again, this is not personal it is about trying to justify the situation.

·      Some will be angry, others distressed, others sympathetic.

·      Some will go with the flow, others need specifics and a clear plan.

Remember the change curve, we all react differently and can revisit the denial, angry, depressed state several times before being able to accept the situation and move on with a plan for the future.

Being transparent and consistent with the messages we are sharing is crucial. We need to give everyone the same level of information, because they will talk to each other and share what they have heard, if we treat people differently then that will create a lack of trust around the whole messaging process. Treating people with respect at this stage may be their last experience of being employed by you, and it will be what they tell others. This is about supporting your organisational values and branding even at such a difficult time.

3)   How to look after those being made redundant

Where possible an organisation can offer support to their employees by helping them in finding their next job. Understand what services are available through the local council, and other networks.  Explore what skills your team can share with those losing their job. For example, if anyone has great networking skills, LinkedIn or other social media expertise, CV Writing etc… Can you afford to pay for another business to offer that service to the employees you are losing? Can someone internally run this process for you? Use your own networks to see if anyone you know can help find positions for them.

Ensure that you have someone they can talk to about their financial situation, pension advice and the like.

Offer regular one-to-ones for them. They may not use them all, however, it shows that you are not running away from this decision, that they are still important to you, and that you are living your values.

4)   How to look after the survivors when you come through the other side

We always assume that the people being made redundant are the only ones who feel the pain. It has been recognised during other times of significant financial challenge, that there is something called the ‘survivor’ syndrome. Those people being left behind need to understand why they weren’t chosen and come to terms with that in their own minds. This can include:

·      Feelings of guilt,

·      Low morale,

·      Increased stress levels,

·      Increased abstraction levels,

·      Delayed decision making, and

·      Lower rates of productivity and performance.

We need to manage this sensitively, recognising that the organisation needs these people and their skills to move forward positively.

We can influence this in the same way as we handle the members of our team who are being made redundant, with respect and frequent communication. Be honest and open with the remaining teams about the challenges that we are all facing, how we are going to support each other in this time of change, and how we value the people we have lost, and kept. Have regular communication sessions, with teams and individuals, check in with people informally as well. Talk through the challenges that you face and encourage them to share their challenges and find ways of overcoming them together. We need to keep talking about this, rather than trying to brush it under the carpet, it is real, it has happened let us accept it together and remember the good times we had with our colleagues.

This is the first of two articles about managing redundancy – the second part will review the process aspect. If this raises any questions for you, or you would like to talk it through at all, please do get in contact. We can help you work through this challenging time, to maintain your own values, treat your teams with the respect that they deserve, and guide you through discussions that you need to have. My email is [email protected]