Alternatives to redundancy

A great number of organisations have had to make difficult decisions this last year due to the slump in business. Redundancies have increased substantially but there are alternatives to redundancy which some employers are overlooking or fail to consider properly.

Making people redundant often results in the loss of staff with a unique blend of skills who might then go to a competitor taking their clients with them. It is sometimes surprising what employees will agree to in order to keep their jobs and those of their colleagues. Yes, there would be disappointment and heads would go down for a while but often there are few if any dissenters. Cutting pay and hours is often much better than making anyone redundant and there is the danger that remaining employees think who's next? and lose heart. The good people may even start looking around for another job and get snapped up by employers in a better shape. There are advantages to shorter hours as well. People go home earlier on a Friday, which gives them longer weekends.

Most companies today are based on intellectual capital and employers need to guard that carefully. Often they have years vested in people's technical capabilities and in their relationships with clients or customers. Today's situation needs a genuine collaboration between businesses and their employees in finding alternatives to redundancy. Cutting pay in exchange for fewer hours or more flexible working or just changing shift patterns to avoid opening the office on particular days to save money are some of the solutions employers are opting for. Career breaks, people taking time off for an agreed period, are becoming more common. People are also being seconded from their employers into client organisations or associated companies.

Perhaps what some employers do not consider are the problems that may be caused when business picks up and they start recruiting again. Rehiring people is time consuming and expensive and not always guaranteed to find the right people. Businesses may also have to compete with their rivals and struggle to attract experienced and competent people. When new people start there may be a period of training required and it will take them some time before they become productive. Add all of this to the cost of redundancy - less wage costs saved and did the original decision really make sense?

There are alternatives and it is advisable to explore all of these before deciding that redundancy is the only option.

Changing Employees terms and Conditions

If you are making changes to employees' terms and conditions, you must make sure all the legal guidelines are followed. Failing to do so could mean being taken to a costly and time-consuming employment tribunal. However, provided you have done it legally, you can push the proposals through. Staff can still ask to be made redundant but in this climate people rarely do that. It is worth remembering that with low inflation and low mortgage rates, people are more amenable to salary cuts. Keeping your employees onside is as important as observing the letter of the law. Asking for their suggestions can even pay dividends in some cases. Most employees know how their work can be done more efficiently and will offer solutions. They might offer to work in a different way, or suggest closing the office on a Friday and have calls transferred to their mobiles. One organisation found it saved £3,000 a month by sending stuff electronically and not on paper. If employees know you are taking genuine steps to avoid redundancies, they will help.

Being honest and open pays dividends.