When people dream of running their own businesses, it’s major deals, dedicated employees and high profile clients they picture. No-one envisages a time when they’ll have to take a member of staff into a room to break the news they’re no longer needed.
But unfortunately, redundancies are part of running a business. Whether it’s due to a change of process that’s made a role obsolete, or a change in requirements that your employees aren’t equipped for, redundancy is a simply fact of life in the business world.
So if you’ve made the difficult decision to let some of your employees go, here’s what you need to know about managing redundancies in a professional manner so that the transition is as easy for your employees as possible.
Best practices for making redundancies
The following pieces of advice can really help to make the transition easy on your ex-employees:
The first thing most people think when they’ve been told they’re about to be made redundant is “how am I going to pay for anything?”. Help to alleviate that pressure by explaining how redundancy pay works (or tell them that information will be forthcoming shortly - it’s likely they won’t be able to take much information in initially).
Then signpost your employees to where they can find information to assist them if they need it. It might not be something they’re ready for just yet, but at least giving them a link to a useful, unbiased source of information about managing money might provide them with some peace of mind if they’re feeling concerned about how they’re going to pay their mortgage, bills and essential overheads in the short to medium term.
Finding a new job will doubtless be one of your ex employee’s first priorities, so make the transition easier on them by making that as straightforward as possible. You may already have a good relationship with a recruitment agency if you find new starters through them, so consider working with this agency to help place your ex employees in new jobs. Not everyone will want to take advantage of this, but some people will certainly appreciate you sharing your contact with them and being prepared to assist the recruitment agency in any way you can.
The employees you’ve made redundant have particular rights under their contracts. However, many of them may not be aware of this, so take the time to remind them of the benefits they’re still eligible for until the last day of their employment. You could do this in a company meeting, taking questions from anyone who has queries remaining.
You’ll need to conduct exit interviews of some sort with all the staff you’re letting go, but try to schedule these interviews once an employee has secured new employment. Time is a healer, and having money worries off the table can make people reflect very differently on their time with a company. Be sure to ask how they felt about the way the company handled the redundancy process - just in case you find yourself in this position again.
Finally, the transition on your ex employees will be much easier if you’re able to keep control of your emotions. You’ll need to display enough consideration to convey empathy and care for their situation, but not so much that you behave unprofessionally. If you have the unfortunate task of notifying people of redundancy, spend some time preparing yourself for the toll it might take - then park your true emotions to one side until you’re out of the office.
Why manage redundancies carefully?
Minimise distress to employees
The first reason to manage redundancies carefully is that doing so will minimise distress to the employees you’re letting go, as well as the ones who are staying. Being told you’re no longer needed is a blow to a person's self esteem, routine and often their sense of purpose, and that’s before you consider the anxiety it will give them about their financial situation and career trajectory. So, minimise the damage by handling it in the right way.
Ensure you’re still regarded as a good employer to work for
Another reason to be careful when making redundancies is that handling it badly could result in your company appearing to be a bad one to work for. While recruitment may not be at the front of your mind right now, it will be before long: especially if your business is moving in a new direction and needs to attract new talent. So, it can pay to ensure all your current and ex employees still have something good to say about working for you.
Uphold your company’s reputation
It’s not just your employees you need to keep happy - it’s your customers and clients too. Redundancy announcements tend (quite rightly) to induce a pang of empathy from those outside of an organisation, so make sure you handle the situation as best as you can to assure your clients and customers that your business upholds values that are important to them.
Avoid tribunals and other legal proceedings
In the UK, employment law means that one false step on your part could result in tribunals and other legal proceedings. So, seek legal counsel before you make redundancies, asking for specific advice on how to handle making redundancies once you’ve established it’s lawful for you to do so.
Common redundancy mistakes
Before we get into the steps you can take to make the transition easy on your ex employees, let’s take a look at some of the most common mistakes that are made.
The first major mistake is gathering people in a room to discuss redundancies en masse. While this may save time and effort on your part, it’s a sure-fire way to escalate a situation. Emotions will be running high anyway, and gathering people together to hear together means that anger and upset can quickly spread from person to person. Instead, talk to people in 1-2-1 settings and try to limit the spread of gossip while you do so.
Another common mistake businesses make is not having a plan regarding how the news is going to be disseminated on social media sites like Facebook, or industry sites like Glassdoor and LinkedIn. Some of your employees may express their feelings on those mediums, so it’s worth asking respectfully if they’d refrain from doing so until all the redundancy notices have been issued, and until they’ve had an opportunity to learn how you’re going to assist them. If nothing else, however, ensure that those in control of your business’s social media do not continue to have access to it once you have announced their redundancy, as HMV learned the hard way.
Making redundancies with dignity and empathy
Part of managing the social media fallout from making redundancies is helping employees to feel that they don’t want to vent their frustrations on social media at all. The best way to do this is to handle the situation with dignity and empathy.
Firstly, schedule meetings away from each employee's designated work area. These meetings should take place on a 1-2-1 basis, which is something your employees will appreciate if they find themselves caught off guard or feeling particularly emotional about the situation.
Secondly, ensure that senior managers are willing and ready to talk to the people that are being made redundant too. Treating someone with dignity means treating them in a way that suggests they are worthy of honour and respect, which is exactly why it’s so important for a senior manager to take the time to thank the individual for their hard work and express their regret about the situation.
Finally, try hard to place yourself in the shoes of the people you are letting go. “You are no longer needed”, “your skills are surplus to requirement” or “we have more resource than we need” sounds an awful like lot “you’re simply not good enough” to the person being made me redundant. So, expect the news to be taken personally, and anticipate that people will react differently. Some will feel angry, some will cry, some will shake your hand, and others will sit in silence while they process the news.
Breaking the news to the rest of the company
As soon as you start announcing the first wave of redundancies, the entire office will know. So, give some thought to how you’re going to manage the staff that remain. Reassure your remaining staff that:
- they won’t be overloaded with work
- the situation has been managed fairly
- there is a way to air grievances and concerns - with managers, anonymous answer boxes and any other channels of communication available
- your staff are visible and valued.
Making redundancies will mean you’ll have sown seeds of doubt among the remaining workforce, so good communication is essential here. Explain - honestly - why redundancies have been made, whether or not you anticipate there being more in the future, and what the company is doing to ensure this situation doesn’t happen again.
Breaking the news externally
You’re also going to need to break the news externally - particularly if you’re a larger company, as more people are likely to have an interest in what’s going on. For this reason, it’s worth preparing a press release to give to regional newspapers and anyone else who contacts your company for information. Gather senior members of your workforce together too and run through a protocol as well as the message you’d like to communicate, perhaps nominating a specific person to handle inquiries.
With this knowledge, you should find the process of making redundancies smoother - and hopefully, the transition for your ex employees that little bit easier too.