Are you contemplating invoking redundancies when Furlough ends?
There may just be some alternatives that you haven’t thought of yet! So, before you press ahead, read below to get my top tips on “Alternatives to Redundancy”.
According to the Office of National Statistics (ONS), the unemployment rate currently stands at 5%, much higher than this time last year when it was 3.9%. This has been a result of hundreds of thousands of redundancies since the start of the Covid Pandemic. Tough times for all!
Whilst for some industries such as hospitality and tourism this action has been unavoidable, it is worth business leaders exploring other options before making decisions to either reduce headcount or worse still, close sites and offices.
So, what are the alternative options and how can they help you retain your skilled workforce and stave off the dreaded ‘R’ word?
1. Lay Off and Short-Time Working
A period of lay off or reduced staff hours is a temporary measure to avoid redundancies whilst there is little work for employees to undertake. This could be due to a temporary need to cut costs or move business operations from one location to another or in the event of a merger or a buyout.
It is useful for all employment contracts to have a contractual clause that provides employers with the right to exercise temporary layoffs or short-time working. If this isn’t written into the contract then there will be a requirement to consult and gain agreement from staff in order to implement.
Employees who are laid off or put on short-time work are entitled to pay for days they do not work. This is called a statutory guarantee payment and is the legal minimum an employer must pay the employee, which is £30 a day for 5 days in any 3-month period. Obviously, if the contract of employment offers an enhanced guarantee payment then that amount would apply. There is certain eligibility that must be met too.
NOTE – For more information on lay off and short-time working, check out the ACAS website – https://www.acas.org.uk/lay-offs-and-short-time-working
2. Recruitment Freeze
Quite simply put, a recruitment freeze places a temporary pause on all recruitment of new or replacement roles. By having a shift of mindset and thinking more innovatively with the existing skills and resourcing levels in the business, you may in fact be able to restructure job roles and departments to help manage the lack of additional headcount at this time. It is all in the Teamwork and pulling together!
If you decide to temporarily pause all recruitment activity, ensure you effectively communicate your decision and the reasons why a recruitment freeze is necessary to any candidates who have applied for positions with you. After all, they may be your top talent of the future and you want to maintain your external reputation, so they maintain interest to work for you in the future.
3. Redeployment
Redeployment, also known as ‘Suitable Alternative Employment’, is a means to reassign positions in the business and transfer redundant staff with the aim of keeping them employed. It can be a useful tool, particularly for larger Companies or where you have roles with transferable skills i.e. Administrators, Health Care Workers, Teaching Assistants to name a few. Redeploying employees to different parts of the business staves off redundancies and enables you to retain the skills and experience within.
When utilising redeployment as part of a redundancy exercise, you must provide the right to a 4 week trial period so the employee can decide whether the role is a suitable alternative for them.
NOTE – Just remember that a fair and meaningful consultation process must still take place if you are intending to make significant changes to employees’ existing roles.
4. Sabbatical
Not such a common offering but sabbaticals are definitely worth considering as we come out of the pandemic into next Spring. With a possible COVID-19 vaccine on the horizon, there is hope for us all that we may just get that much needed holiday next year. So, with that in mind, many employees may have a burning desire to travel or to learn a new skill or gain a qualification so by offering a period of unpaid leave, such as a sabbatical you are retaining the valuable skills in your organisation and saving costs in the short term. Definitely worth having that conversation with your staff to explore if there is much appetite for this.
NOTE – Any temporary change in the contract is documented and you write to the employee detailing the terms of the sabbatical.
Finally…if redundancies are an absolute necessity…
Whilst these options may be credible, redundancies may still be inevitable. Therefore, my number one Top Tip, if you are contemplating redundancies is to…PLAN, PLAN, PLAN NOW! As Benjamin Franklin says “By failing to prepare, you are preparing to fail”.
As an employer, you have a legal obligation to consult with staff about any proposed redundancies and if you are intending to make 20 or more redundancies you will need to factor in a period of collective consultation with Staff Representation. Pre-planning and carrying out your due diligence early will avoid any unnecessary costs.
NOTE – If would like to explore these options in more detail or run through what a redundancy process looks like, feel free to book a no-obligation chat with me via https://bluskyhr.co.uk/contact/ or email [email protected].