Making your employees redundant is hard. It’s natural to feel a burden when you hold the fate of others in your hands. In our latest blog, we set out what you can, should and must do during the redundancy process to make sure it’s carried out fairly, sensitively and legally.
Redundancy best practice: what can I do when making someone redundant?
We’ve detailed 10 things you can do to handle your redundancy process fairly and sensitively:
- Provide your employees with as much notice as possible and start consultation as early as you can. Listen and consider all suggestions as part of consultation.
- Invite employees to volunteer for redundancy in the first instance and consider a ‘sweetener’ – i.e., above the statutory minimum for those that volunteer first if budget allows.
- Use defined selection criteria which can include interviews to select employees for redundancy.
- Clearly communicate redundancy selection criteria to your employees and allow employees ask questions about the selection process. Consider all alternatives to redundancy. Redundancy should only be a LAST resort. Remember, it’s the role that is being made redundant.
- Schedule more than one meeting (as part of the consultation process) to allow employees to discuss selection criteria and give them plenty of opportunities to consider their options.
- Be flexible on notice periods – i.e., allow them to leave early – the decision is ultimately yours, but if they’re keen to move on, try to support and facilitate this.
- If budget allows, consider going beyond the minimum statutory redundancy requirements.
- Consider offering emotional support and access to counselling – it’s a stressful process, so listen and help where you can.
- Be flexible about allowing employees to book time off to attend external interviews
- Look after those who are not leaving, they need support too!
Remember – communicate, communicate, communicate and then communicate some more.
What should I ideally do when making someone redundant?
Your employees are entitled to a fair and objective process, so implementing the following steps will help things to run smoothly.
10 things you should do during the redundancy process:
- Explore alternatives – for example, alternative roles with similar pay, skills and conditions, before making your decision. Redundancy should always be a last resort
- Explain why it’s happening and provide an estimated timeline.
- Define and explain the criteria for redundancy.
- Emphasise at the first consultation meeting that no decisions have been made and you wish to work with your employees to find the best solution for everyone.
- Take the consultation seriously – your employees may have some fantastic ideas you hadn’t considered.
- Invite employees to at least one 1-2-1 meeting.
- Take and circulate minutes of all meetings.
- Prepare a matrix of employment criteria to choose the most suitable roles to retain and let go. Remember, it’s the roles being made redundant, not the people!
- Inform employees in writing if their roles are being considered for redundancy
- Inform affected team members they can appeal your decision.
Keep an open mind ahead of the redundancy process and make sure you support your employees as much as you can, such as helping with CVs, interview tips, references, outplacement support or offering training to assist them in securing another role internally.
What do I have to do when making someone redundant?
Under the 1996 Employment Rights Act, employees can be made redundant if the following statements are wholly or partly true:
- The employer ceases to continue the business
- The employer ceases to continue the business in the location where the employee worked
- The need for employee/s to do work of a particular nature ceases or reduces
- The employer no longer needs work of a particular nature to be carried out in the location where the employee worked
When it comes to your legal responsibilities, here are 10 things you must do before making someone redundant:
- Give a paid notice period ahead of redundancy (the length depends on employees’ contract and length of service).
- Carry out a meaningful consultation process to justify your reasons for the redundancies and ensure the process is fair and objective.
- Invite employees to take part in the consultation process in writing.
- Ask employees to attend at least one meeting during the process.
- Detail any severance payments in writing. Employees with more than two years’ service are entitled to at least the statutory minimum.
- Don’t use a “last in, first out” approach – that ended years ago.
- Pay furloughed employees redundancy pay based on their standard wage, not their furlough wage.
- Ensure it’s a fair process that doesn’t discriminate. Selection is based on set criteria that should not discriminate.
- Don’t pre-select employees before the consultation period or selection period.
- Do allow reasonable time off for job interviews.
Help for employers during the redundancy process
Handling human emotions is always challenging, and every business has different needs and experiences.
Our expert advice will ease your redundancy process and help achieve a positive outcome for all.
You can also download our free restructuring kit, full of advice and useful templates, to help you steer your business through times of change.
Need extra support in making redundancies? Crosse HR are experts in understanding you and your business, and we’re here to help. Together, we can find the right redundancy solution for your workplace and implement it smoothly and successfully.
Contact us on 0330 555 1139 or email@example.com
Businesses are facing many challenges right now as they seek to recover from the shock of the pandemic, recover as best possible and plan for rocky tides that lie ahead. However, perhaps one of the most pressing challenges for businesses post-lockdown is about being lean but not mean.
What am I trying to say?
I am talking about balancing cashflow and the affordability to resource with customer and employee satisfaction.
Many business owners have had staff on furlough and are trying to get the timing right in bringing those staff back to work, whilst others are debating how much temporary resource they might need and when.
How does this impact Customer Satisfaction and Employee well-being?
Two examples I have seen this week…
I am currently going through a house purchase. Our buyer changed solicitor mid-way through the process as the firm had furloughed so many people, he couldn’t get the service he needed.
A client of ours was telling us about her husband who is being asked to carry the work of his department of three; to achieve this, he’s having to work twelve-hour days to keep up. The firm can then maximise their use of the furlough scheme.
In both of these examples, the firms are clearly trying their best to manage cash to preserve their future.
However, the outcome is not good for the business with the first example meaning the solicitor lost the work. In the second, the employee, who is already drained after everything we have all gone through in the last few months, due to worries about job security, is sadly expected to accept this increased workload.
What can you do to get it right?
Plan, plan, plan
Of course, no-one knows what the future holds right now and what the recovery will look like, but you still need to try. Doing so will help to estimate the optimum time at which you will need more resource. My advice; –
- Make your best estimate on what income will look like
- Assess the staffing capacity you need to service this well
- Understand the trigger points in advance on when you need to bring the additional resource into service customers and ensure employee well-being.
Consider Capacity requirements
If you have used the furlough scheme, take advantage of its flexible nature. Remember, you can bring people back on any working pattern now so assess what is right for you.
Consider: is it more efficient to bring people back for one day and get everything done for the week ahead or is a few hours per day more appropriate?
If you use any temporary or outsourced resources, talk to them. Make the situation collaborative and discuss what you need, try to be flexible to ensure they can perhaps top up with work from other sources.
Once you’ve looked at what income you might get, and the resource required then look at your cashflow.
- What does that mean for you as a business?
- Do you need additional funding to get you through the next few months?
The balancing act
It is very hard being a business owner right now.
We are all trying to manage cashflow as best we can in uncertain times. A little bit of planning will ensure you can look after your employees, your client and your bank balance.
Be lean but don’t be mean.
About Helen Fleet
Helen Fleet of HF Financial Strategy works as a Finance Director and guides companies in delivering their financial and business objectives. These can include cashflow planning, pricing reviews and ways to improve profitability.
Follow Helen on LinkedIn here.
Remember your swimming badges at school… My least favourite was the one where – after you had already swum multiple lengths and dived in for a brick – you still had to swim a length in your pyjamas. I remember feeling tired, my swimming stroke wasn’t particularly strong and the weight of my wet PJs made the last bit pretty tough.
I think a lot of us feel like that now, having got through the last few months and fortunate to still have a business, we now must turn our attention to making it post-lockdown. We all feel a bit beaten up by it all. That’s why I’ve decided to share a few tips to get you energized and ready to tackle the post lockdown period.
We are all in a growth phase now as we rebound from this period, but this is different from when you started your business and grew from nothing. Now you can use everything you have learnt from the first time you did it and grow faster and more profitably.
My two key questions to consider;-
Who you want to sell to?
Is it the same people you sold to before or do you now better understand the profile of customer you want to work with? Think about the size of customer, the sector they are in, the location or even the number of decision makers you have to deal with.
What do you want to sell?
Do you know which of your products or services are the most profitable? Can you drop services you didn’t enjoy delivering, have you pivoted during lockdown and have great new offerings to get out there?
Do you know the maximum capacity you could deliver right now based on your existing cost base?
It’s important to understand this and compare it to what you are delivering and think you may be able to in the coming months.
If you realise you are currently over- capacity, then consider:
-Use of the flexible nature of the Job retention Scheme from 1 July. Understanding what staff you need now is key and knowing your trigger points in terms of sales vs capacity, so you bring people back at the right time.
-Unfortunately, you may need to make redundancies now to preserve the long-term future of your business. If based on realistic sales this is necessary, then do not take too long making this decision.
If you are under capacity because business is going better than anticipated, then think about whether you really need to employ or are you better surrounding yourself with a network of good quality freelancers. The second option puts less pressure on fixed cots during what may be a volatile time.
In such an uncertain time there is no getting away from the fact you need to forecast your cash flow.
Factors to consider:
Income – So hard to really know what will happen- will recovery be U or V shaped- who knows. Start with your best guess based on what you know now.
Costs – Ensure you build back in any costs which have been reduced during this period e.g. rent reductions, other premises related costs. You may also want to build in costs to help you re-build such as advertising or marketing.
Loan repayments– any loan repayment holidays may be about to expire so ensure you have considered these.
Tax deferrals – If you deferred Vat as part of the Vat deferral scheme ensure you rebuild in repaying this before 31 March 2021.
Sensitivity – Now you have done all this look at how sensitive you are to change – if sales were 10 or 20% lower than you have forecast what impact will that have on your cashflow
Financing – Now you know your position consider if you have the right financing in place.
So deep breath folks, we made it this far. You built your business before and all of this will help you to build faster and more profitably second time round.
Helen Fleet of HF Financial Strategy works as a finance director and guides companies to delivering their financial and business objectives which can include cashflow planning, pricing reviews and ways to improve profitability.
Helen kindly crafted this blog as part of our Return to Work Toolkit. You can download it for free here.
We are living in very strange times and it is not the first time I have said that…
Who would ever have thought 3 months ago that we would all be cooped up in our own homes for days at a time, let out for an hour, having to queue for our shopping, fretting about toilet roll and tinned tomatoes, baking banana bread and relying on a thing called Zoom we had barely even heard of? Some days, I feel like we’re trapped in some weird apocalyptic Netflix drama – but maybe that’s just because I’ve spent a while watching that too – Tiger King and White Lines anyone?
Moving Forward – HR in a Post-Lockdown World
However, lockdown didn’t keep us down for long. We adapted surprisingly quickly, kept going and it’s starting to feel like we’re finally coming out on the other side.
That’s the reason for this blog to be honest…
My raison d’etre is to help small businesses navigate the intricacies and plain madness that comes from employing staff, so I decided to make things easier for you all and put together a pack with all the common questions I am being asked by you about the ‘BIG RETURN’ – along with some guidance, information and resources that should help ease your concerns.
The amazing Helen Fleet will also be contributing from a financial standpoint (we are all in this together).
So, you want to open up and start the BIG RETURN, what should you do?
Firstly, you need to think about what your organisation needs to look like; i.e. will it be the same or will you need to pivot and change?
- Do you need to bring people back into the office or keep them working from home for a while or for the foreseeable future?
- Have you furloughed staff you need to bring back or are you keeping them on furlough or a bit of both?
- Will some staff be returning at all?
Bringing People Back
What should you be considering before you bring people back? Making these considerations is a great place to start…
1. The big first tranche of returnees will occur in July where the furlough rules are changing to allow employees to be furloughed on a part-time basis. If you need to take employees off furlough, it is advisable to write to them to have it confirmed. In our COVID support kit, we’ve crafted a brief returning from furlough letter template to make this an easy task.
2. You need to do a Risk Assessment for each returning employee. Unfortunately, the only COVID specific risk assessment I could find is from the Northern Ireland HSE but its great and I highly recommend you use this as a basis for your risk assessments. You can view it within the risk assessment pack of our toolkit here.
3. You need to get your offices ready so that the appropriate level of social distancing can occur. It’s also a good idea to deep clean the office if you can and provide plenty of hand sanitiser, soap and notices from the HSE around hygiene and safe practice. Encouraging good hygiene practice will help to keep to kill the virus.
4. You also need to think about your employees’ journeys to work. Does this put them at risk?
5. It may be worth considering staggering and extending hours, and whether working more flexibly could help your business get back quicker. Check out our Flexible Working Policy within our pack for more information on this.
6. Do you even want your employees in the office at all – or would you prefer they worked from home? If so, we’ve also created a Working from Home Policy to help you formalise and control this agreement.
7. You may want to restructure.
8. You may need to consider redundancies.
These are just some of the considerations you may want to make before rushing back to work.
When They Return
Mental health, divorce, feelings of anxiety and displacement, pure joy and relief – these are just some of the things you must prepare to face on your return.
But don’t worry, CrosseHR are here to help and we have you covered. Our comprehensive Return to Work Toolkit has been drawn up by experts and our team. It’s designed to help provide you with everything you need to get started, including:
- Information on Ending Furlough
- Return to Work Letter Template
- Information for Directors
- Health and Wellbeing Policy
- Sickness and Isolation Support
- Health and Safety Guidance
- Changing Terms and Conditions
- Childcare and Returning to Work
- Maternity Issues
- Conducting Return to Work Interviews
- Flexible Working Policy
- Flexible Working Request Form
- Flexible Working Methods
- Homeworking Policy
- Stress Awareness Template
- Supporting Employees – Debt
- Energise – Tackle Business Finances with Helen Fleet
- Supporting Employees – Divorce
So feel free to download it, it’s on us! And, if you want to chat further, we are always delighted to help.
Olga Crosse, on behalf of the team at Crosse HR.