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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 Radford

Tina Radford

Tina Radford is the founder and Managing Director of HR Business Solutions. She is a firm believer that implementing the right HR solution can make a fundamental impact to the overall performance and effectiveness a company’s most valuable asset – staff. In her blog, Tina brings a refreshingly different style and substance to the typical corporate HR presentation.

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