4 min read
12 solutions that are better than compulsory redundancy
Published: November 19, 2020
Microsoft Partners — Before you commit to redundancies, have you considered all the options that are available to you?
Here are some alternatives to redundancy that you may want to discuss with your employees. Some of them, or the combination of a few, might give your business the wiggle room to survive while avoiding compulsory redundancies. Also, don’t forget redundancies aren’t a cheap option.
Employees are arguably your most valuable resource in the business. Think about the training you’ve invested in them, the loyalty and trust you’ve built over many years, the role they play in your brand and marketing, the skills and expertise they have and the relationships they’ve forged with your clients. In the face of potential unemployment, even normally unpalatable choices may be appealing.
Above all, being open and honest with your employees will help to get them on board with the alternatives. Don’t forget to consider your legal obligations with these options too. We at Law 365 can help talk you through these options and the legal implications.
- Freeze recruitment and retrain staff
Could you retrain and redeploy staff to fill some vacancies? Careful consideration should be given before continuing with (or embarking on new) recruitment drives. A recruitment freeze should be across the business, regardless of the different impact changes in the economy might be having across areas.
- Temporary/Agency staff and consultancy contracts
You may have already done this, but if not, now is the time to review and consider giving notice on your contracts.
- Early retirement
Some employees may be interested in this as an option – suggest it and see.
- Voluntary redundancy
Don’t forget that voluntary redundancy is something you may wish to discuss with your team as an alternative to compulsory redundancy. Ultimately though, the decision is up to you as the employer – you can refuse an application for voluntary redundancy.
Is this something that you might offer and employees might be interested in? Unpaid sabbaticals would save money and the business’ fortunes may have turned around during the sabbatical period.
- Flexible working and job shares
A reduction in hours across roles could keep all employees in a job but reduce the business’ costs.
- Parental leave or extended maternity leave
Many employees are unaware they are entitled to up to 4 weeks’ unpaid parental leave each year for each child under the age of 18 (up to 18 weeks’ leave for each child).
- Bonuses and pay rises
Consider reducing or removing discretionary staff bonuses for the upcoming period or financial year or you might instead defer them until a later date. You could also defer pay rises – few should complain if you explain the financial situation and present this as the solution to keeping as many staff as possible.
- Employee perks
Do you fund gym memberships and massages for staff? Do you have expensive flowers on the reception desk? Do you subsidise an office cafeteria? Tea and biscuits in the meeting rooms? What could you save if these were removed? It all adds up. If they are contractual benefits then talk to your employees – would they agree for these to go if it means saving jobs.
- Freeze or cut training and education budgets
Staff development is a crucial part of the cultural fabric in most forward thinking businesses, but making cuts in this area is a sacrifice worth making to save the business. Explain what the costs are to provide these services, and make it clear that this is only temporary measure to be reviewed. However, be aware that if training is part of your agreement with any of your employees, making these cuts could result in a breach of contract claim.
- Reduce pay
You could ask employees to take a % pay cut – which may only be temporary to alleviate cash flow in the short term. Given the alternative, many may accept this and welcome the opportunity to stay in work. Lead from the top by starting with management first.
- Furlough or lay off or short time working
Furlough is still an option now that the CJRS has been extended. After that temporary lay-off (without pay) or short-time working (effectively reduced hours and reduced pay) could be explored provided the legal implications are considered.
With many businesses moving to remote working you may also want to think about wider strategic decisions like relinquishing your offices entirely which could save you all the associated costs – rent, insurance, utilities etc as well as the investment in support roles like office managers and reception staff.
All in all, consider what might work well for the business and what might preserve the business’ reputation more effectively. Being creative and thinking of alternatives is not only more likely to make you and your employees feel a little more positive but it is an important step in terms of mitigating the risk of unfair dismissal claims too.
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