The People Bulletin

There is no doubt that the recession is biting and as a HR professional you may have already felt the impact, particularly with regard to redundancies.  Acas has seen a sharp rise in the number of enquires to its helpline on redundancy issues. We have also seen the usual recession-sensitive barometers such as a rise in employment tribunals relating to unfair dismissal, redundancy and breach of contract[1].

One of the key things we are seeing from employers calling our helpline for advice is ways of avoiding or confining redundancies. In fact, many businesses and organisations are using innovative ways of avoiding compulsary redundancies – for example, through personal leave development plans, holiday days, buy back schemes or short-time working[2].

To help organisations and businesses survive the recession, and lessen the impact it has on productivity, managers need to keep employees engaged. Often the best motivation for engagement is being involved and having a say, contributing to the discussion on how to manage the downturn and how things need to change now and in the future. This is one of the best ways to build trust – as long as the ideas are taken seriously and acted on.

‘Legal’ is not enough

Management will be judged by their actions, not so much about the tough decision itself but how it is carried out and whether it is fair. Are people given all the information, is the choice of who had leave fair and reasonable, does the organisation help them by offering guidance and talking with them face to face about the options? Is the redundancy pay and period of notice not just legal but the best possible in the circumstances? The media and the talk in the community can easily damage a firm’s reputation if the principles of fairness are broken, even if what was done was technically legal[3]. 

Acas and the CIPD recently launched guidance on Managing in Recession
[4] which emphasises the importance of organisations managing for the long-term and being innovative in their approach to avoiding job cuts wherever possible.

Tips include: 

1. Think long term. Think creatively about how to reduce employment costs, such as new ways of working and work reorganisation. Remember that making people redundant and recruiting again later when the market picks up is expensive.  Protect and make the most of the training budget (if you have one) – focus resources on key areas such as improving line management capability and customer service.  
2. Maintain employee engagement. Redouble your efforts to boost or maintain employee engagement and manage expectations and set a clear sense of direction. Keep employees in the picture even when there is little concrete news and use all media available to beat the rumour mill. Think about creative, non-financial ways of motivating employees such as recognition schemes, team-building days and employee awards.
3. Strengthen line management capability. Support your managers so they are better able to operate in periods of traumatic change. Brief line managers in full on developments so they can talk to their teams – face-to-face communications are best. Recognise the vital role that line managers play in every aspect of the employment relationship – make sure they are properly trained in day-to-day people management skills.
4. Support employees’ health and wellbeing. Recognise the psychological burden and impact that can arise in a recession – make sure workplace support and occupational health provision are in place to prevent high levels of work-related stress. Where possible provide opportunities for flexible working to help employees balance their work and home lives.
5. Develop a strategy for redundancy so it’s there when you need it. You need to start thinking about how you will handle significant redundancies at least three months before you anticipate they might need to take effect. Ensure the HR team is equipped to deal with redundancy situations at both collective and individual levels and understand the law relating to redundancies and review procedures. Establish a policy and procedures to be used if workforce reductions are unavoidable, and communicate these to staff.
6. Think about ways to minimise redundancies if workforce reductions are inevitable. Take advantage of natural wastage and/or offer voluntary redundancy terms – redundancies can have a serious negative impact on morale and performance. Look at cutting back on recruitment and review your use of temporary staff. Other examples include reducing or eliminating overtime working or offering short-time working, temporary lay-offs or sabbaticals.
7. Consult with your workforce and employee representatives. Consult with your trade union if one is recognised. If there is no trade union, set up a special employee forum or consultative body long enough before the redundancies occur to provide information and to consult. Consult employee representatives about ways to avoid redundancies, reducing the number to be dismissed and mitigating the consequences of any redundancies.
8. Establish fair and objective selection criteria that will help you to retain key people.  In selecting people for redundancy, use objective criteria that can be applied in an unbiased way. This can include, for example, attendance records, disciplinary records, skills, experience or competence, work standards or aptitude to work. 
9. Help redundant employees to find other work. Those who are facing redundancy need support and advice on how to cope – consider offering outplacement services and counselling to help redundant employees find new employment. Give time off to let affected employees look for other work or arrange training.
10. Plan for the future.It may seem a long way off but the recession will end so looking at the longer term picture is essential. Give positive messages focusing on the opportunities as well as the challenges ahead. 

1 See also  www.acas.org.uk/recession

2 See also Laurence Dunn’s article ‘Flexible friends’ in this issue of The People Bulletin. http://news.thepeoplebulletin.co.uk/wordpress/employment-law/flexible-friends/

3 See also James Baker’s article in The People Bulletin, 12 May 2009: Beyond the P45. http://news.thepeoplebulletin.co.uk/wordpress/employment-law/before-the-p45%e2%80%a6/ 

4 www.cipd.co.uk/subjects/emplaw/redundancy/_hwmngwrfrcs.htm