What should you consider when planning redundancies in your business?

Handling redundancies in a business is never easy…

The process requires careful planning, empathy and strict adherence to legal guidelines.

With redundancy numbers rising, it’s more important than ever for business owners to understand how to manage this challenging situation correctly to avoid claims, maintain morale and protect the company's reputation.

Here's a comprehensive guide on how to navigate redundancies thoughtfully and lawfully:

Consider your reason for redundancy

Redundancy is not about the person—it’s about the role. Before making any decisions, ensure your reason for redundancy is valid.

Common reasons include:

- Business closure or downsizing

- Restructure of the business resulting in loss of roles

- Changes in the types or numbers of roles needed

- Relocation of the business

These reasons must be genuine, transparent and communicated effectively to those impacted.

Plan thoroughly before acting

Planning is critical. Start by assessing all other options, such as redeployment, reducing overtime or letting go of temporary workers. If redundancy remains the only option, create a detailed plan that includes:

- The number of redundancies anticipated

- Business reasons and alternatives considered

- Timelines for the redundancy process

- Selection pool, criteria and scoring systems

- Whether pay and notice periods are statutory or contractual

The planning stage sets the tone for a structured and transparent process. Sharing this information with affected employees helps them to understand the decision-making process, reducing confusion and frustration.

Inform and consult

Consulting with employees in the selection pool before making a final decision is both a legal requirement and a critical step in the redundancy process. This consultation should be genuine and meaningful, providing a platform for employees to voice their concerns and suggestions.

If 20 or more redundancies are planned, you will need to undertake a collective consultation process.

Use objective selection criteria

The selection process is one of the most sensitive aspects of managing redundancies. Ensure the criteria are:

- Transparent and non-discriminatory

- Based on objective factors, like skills, qualifications and performance

- Communicated to all employees involved

A well thought out and fair selection process helps to avoid claims of bias or unfair dismissal, protecting your business from legal challenges.

Support and communication

Handling redundancies isn't just about following legal requirements—it's also about showing empathy and supporting affected employees.

Effective communication throughout the process can significantly affect how redundancies are perceived by remaining staff and those leaving.

- Offer support services, such as career counselling or help with job searches

- Be open and honest about the reasons behind the redundancies

- Keep lines of communication open to maintain trust and morale

Get professional HR support

Redundancies are complex and fraught with potential legal pitfalls.

As an HR company, we can help guide you through the process, ensuring compliance with legal standards, reducing the risk of unfair dismissal claims, and supporting a fair and empathetic approach.

By partnering with Hill HR, you can navigate this sensitive process smoothly while keeping your business running effectively in the background.

Get in touch for a confidential chat today.