In today’s challenging economic climate, even well-established and resilient businesses may find themselves needing to restructure. While entering a redundancy consultation is never a decision taken lightly, the way it’s managed can have a lasting impact on the people involved and the wider organisation.
Every employer has legal obligations to follow during this process, but for SMEs, there are additional challenges — particularly when trying to balance financial pressures with the reality of restructuring a close-knit team built over many years. Getting it right takes careful planning, clear communication, and support for everyone affected.
In this blog, I’ll share my top five practical steps for employers to consider when managing redundancies thoughtfully and responsibly.
1: Consider what you can do to avoid compulsory redundancies
If the redundancy situation has arisen due to a need to save costs, there are a few options business owners can consider before moving to compulsory redundancies. One option is considering Short Time Working and / or Lay Off, checking the wording in contracts and having clear communication around this is essential.
A voluntary redundancy scheme can be a useful step to implement, however before you enter into discussion with staff around voluntary redundancy you should be clear on the process and eligibility and the budget if enhanced redundancy payments are to be offered.
2: Avoid mixed messages
In SMEs it is possible that one area of the business is doing very well and expanding but another needs to reduce in size. This can be a difficult dynamic to manage especially in smaller organisations where teams are connected and are likely to be aware of what is going on in other areas of the business. Taking time to manage this situation sensitively and being aware of how communications may land is really important.
3. Communication is key
The legal framework sets out minimum timescales when dealing with more than 20 redundancies in a 90-day period. For lots of small businesses the number of redundancies falls below this threshold so collective consultation rules will not apply. Making sure you communicate in good time, answer questions your employees have and ensure consultation is meaningful are key steps in managing this process. The legal obligations should be seen as a “baseline” but never forget you are dealing with people who, in most cases, have not chosen to leave your organisation.
4. Support to find another job
Where redeployment opportunities exist within the organisation these should always be discussed with employees who are at risk of redundancy. The vacancies available are likely to be different jobs but it is always worth exploring if an employee may be interested in re-training. If an alternative role is found within the organisation, then a trial period should be put in place for this new job.
Some staff may have been out of the recruitment market for a while so it would be helpful to consider how you support them. Help with drafting CVs, wording for linked-in profiles and introductions to recruitment agencies are all helpful steps.
5. Plan early
I have left the most important one until the end!
Considering redundancies is never easy especially when you have spent years building a team and you work closely those who will be impacted by this change. The best advice I can give is to examine your business and be honest about current performance and future predictions – don’t focus on best case scenario when making these plans.
Speaking to someone who is external to your business and can come to this with a fresh pair of eyes can be a really useful step for business owners. I am always happy to have an initial confidential chat about options to help business owners plan next steps. If you think this could be useful, please get in touch.
Every employer has legal obligations to follow during this process, but for SMEs, there are additional challenges — particularly when trying to balance financial pressures with the reality of restructuring a close-knit team built over many years. Getting it right takes careful planning, clear communication, and support for everyone affected.
In this blog, I’ll share my top five practical steps for employers to consider when managing redundancies thoughtfully and responsibly.
1: Consider what you can do to avoid compulsory redundancies
If the redundancy situation has arisen due to a need to save costs, there are a few options business owners can consider before moving to compulsory redundancies. One option is considering Short Time Working and / or Lay Off, checking the wording in contracts and having clear communication around this is essential.
A voluntary redundancy scheme can be a useful step to implement, however before you enter into discussion with staff around voluntary redundancy you should be clear on the process and eligibility and the budget if enhanced redundancy payments are to be offered.
2: Avoid mixed messages
In SMEs it is possible that one area of the business is doing very well and expanding but another needs to reduce in size. This can be a difficult dynamic to manage especially in smaller organisations where teams are connected and are likely to be aware of what is going on in other areas of the business. Taking time to manage this situation sensitively and being aware of how communications may land is really important.
3. Communication is key
The legal framework sets out minimum timescales when dealing with more than 20 redundancies in a 90-day period. For lots of small businesses the number of redundancies falls below this threshold so collective consultation rules will not apply. Making sure you communicate in good time, answer questions your employees have and ensure consultation is meaningful are key steps in managing this process. The legal obligations should be seen as a “baseline” but never forget you are dealing with people who, in most cases, have not chosen to leave your organisation.
4. Support to find another job
Where redeployment opportunities exist within the organisation these should always be discussed with employees who are at risk of redundancy. The vacancies available are likely to be different jobs but it is always worth exploring if an employee may be interested in re-training. If an alternative role is found within the organisation, then a trial period should be put in place for this new job.
Some staff may have been out of the recruitment market for a while so it would be helpful to consider how you support them. Help with drafting CVs, wording for linked-in profiles and introductions to recruitment agencies are all helpful steps.
5. Plan early
I have left the most important one until the end!
Considering redundancies is never easy especially when you have spent years building a team and you work closely those who will be impacted by this change. The best advice I can give is to examine your business and be honest about current performance and future predictions – don’t focus on best case scenario when making these plans.
Speaking to someone who is external to your business and can come to this with a fresh pair of eyes can be a really useful step for business owners. I am always happy to have an initial confidential chat about options to help business owners plan next steps. If you think this could be useful, please get in touch.
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