Redundancy: what to remember and what to avoid

In this episode of the Acas Podcast, our advisers Maggie Steven and Faye Law talk through things for employers and managers to keep in mind when managing redundancies.

We discuss:

  • how to communicate well, and why it matters
  • maintaining trust
  • how to support the wellbeing of all involved
  • ensuring it's a fair process

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This is a conversation about what to remember, and avoid during a redundancy process between Sarah Guthrie, and Acas advisers, Maggie Steven and Faye Law.

Sarah Guthrie: Welcome to The Acas Podcast. My name is Sarah Guthrie. I'm part of the communications team here at Acas and today I'm joined by Faye Law and Maggie Steven, who are workplace advisers with Acas. We're focusing on redundancy today, which is a huge topic at the moment. And I wondered, Maggie, if you could kick us off with giving us a bit of context. What are the main challenges that employers and staff are finding at the moment around redundancies?

Maggie Steven: I think some of the biggest challenges — and this is whether it's a large organisation or small organisation — is the fact that COVID happened very quickly. And so for many very viable businesses with healthy cash flows — very quickly, very suddenly — their business model changed. But because of that, it meant for a lot of organisations they weren't able to plan as you would normally do.

And therefore we're now kind of almost 5, 6 months down the line and organisations still don't really know where we're going in terms of the economy. They're starting to open up, there's some really good green shoots. But for many, it's still unsure. And therefore when we could talk about redundancies, you know what is the right way to go?

Often organisations are hoping they're going to build their business. But in the short term, they may have some cashflow implications. So they want to retain skills rather than redundancies. But they may find that they're in a position that they may have to make some in the short term for the long term. So there's many variants that are feeding in and it's still quite a lot of unsurety about what's right for them at the moment. Very difficult decisions.

Sarah: What do you think the alternatives to redundancy are? You mentioned that organisations need to retain skills. How can they do that?

Faye Law: The first thing you can do is ask your staff.

You're in a really difficult position and the most important thing to do is to communicate clearly and openly and be as honest with your staff as you can. You've got to consult them. And the obvious benefit of that is that often those who are doing the jobs are the ones who best know where improvements are. But if you engage with your staff and you work collaboratively with them, that's better for morale. They might come up with great ideas to help reduce redundancies.

You're going through a difficult exercise and the aim of that is to preserve a viable organisation at the end of it. So I like to think as you're going through this, you should be planning for the organisation after the end of the exercise and keep your focus on that. And you want the people that you keep, as well as the people that you sadly have to lose, to not be scarred by the process. You want them to be engaged employees who still trust you. And the only way you can achieve that is by having them understand the position you're in and hearing their concerns and responding to their concerns and using that to make best-informed decisions that they can buy into.

Sarah: That sounds like quite a challenge at the moment. Could you give us an example, perhaps of where you've seen it done well?

Faye: Yes, I worked with an organisation recently that was unfortunately facing the loss of quite a proportion of its workforce, and, they did the exercise well in that they jointly trained staff representatives and the management representatives, both around the law on redundancy and consultation, but also on how to work together and communicate collaboratively.

And as the process has gone on, we can see that management was sharing information, gaining the trust and the joint working then of the staff who were at risk. And the staff, although in that awful position themselves of fearing loss of their own jobs and their colleagues’ jobs, could genuinely see and believe that management were having to make difficult decisions and they could understand the reasons why.

And there was one particular group of staff that were looking at losing half of their team. Clearly that was a very difficult situation for them. But they understood management's proposals, they'd seen the financial information, they'd seen the projections on footfall in the business. And they really understood that there was a need to make those cuts. And then they also looked at work in their sector and realised that in their particular job line, there wasn't a lot of local employment for them.

So collectively, that group of staff got together and agreed to vary their contracts and cut their hours by 50%. And that's a decision that had a huge impact for each of them personally. But they decided to stay together as a group and take that impact, rather than become unemployed.

And the employer had gained their trust in that and reinforced that trust by negotiating that as a temporary reduction in hours. I think it was for a 6 month period. And that way the staff could retain some employment, albeit at that huge cost, and the employer then retained the flexibility in the workforce. So that in 6 months' time, if things do begin to pick up — because it's all so hard to predict right now — they wouldn't have to go through future costs of recruitment.

It was a huge decision for those staff involved and a dramatic one. And it's worked out well for that particular organisation. It's not going to be suitable for everybody. Not all members of staff could possibly even contemplate that. And I know the unions have cautioned very strongly against current financial circumstances driving down people's terms and conditions. It was just that in this particular institution there was a high degree of trust, and people wanted to remain there.

Sarah: And that sounds like quite an unusual example. What was it, do you think, that made that outcome possible?

Faye: It was the openness. It was that management and the decision makers were able to sit in virtual meetings with people and be transparent and honest. And the employees had felt that it was a genuine process because they felt fully informed, they felt invested in, and they'd been trained so that they could participate to their best in the process. And it was that degree of trust between the 2, and the fact that management were happy to make it a temporary contract variation enabled that to happen.

Maggie: I would certainly agree with Faye. You know, throughout the workplaces, everyone knows how significant this has been to, you know, the economy. So, this is the opportunity to be working collaboratively about how do you maintain and really look to the future to secure employment. But it is going to be difficult times. So totally agree. Where I've seen that work well, it's where that transparency and trust is built.

Sarah: So it's about communicating openly, keeping your employees fully informed, investing in them through training in this example and being transparent, collaborating with them and all of that builds trust. One of the very practical questions someone might have listening to this podcast is how do you build that trust and do that consultation remotely?

Faye: The more information you can share about the prospects of the company, your plans, your reasons for your proposals, and importantly, how you propose to maintain a viable structure, the better. But also, you've got to be open to staff’s questions, concerns, suggestions. If you're not responding to staff on what they're saying and what they're feeling, they're not going to take in what it is that you want them to understand – no matter how valid or necessary you feel your proposals are. It has to be a two-way street.

Maggie: And that comes back to the early planning. The people that may be being made redundant today may well be the people you want back in 3, 4 months that have the skill, have the knowledge of your business, you're in a position to take them back on. So really, you know, working with people and really giving the respect and the communication tools helps kind of maintain that relationship. Not just now, but actually if they do leave you, you continue to have that good relationship that they'll want to come back and work with you.

But coming back to the planning stage — and building on what Faye is saying — it's looking at those communication tools and how you're going to communicate. So, working remotely brings additional challenges. And there's certainly something to say that people are finding working using the different methods of working remotely — camera, screen — can be quite tiring, actually. And this can be a very intense process as well, so allow more time for that.

But also look at the different forms of collaborative sharing of information – spreadsheets, looking at questions and answers, how people are accessing that and, if people are working remotely, what's their bandwidth? So really, have those early stage conversations with anyone that's impacted to understand what might create any barriers for them to be able to be involved with the consultation process well. And then look at how you can overcome those barriers.

Sarah: So it's a two-way street and it works best when employers listen and show that they've listened. And as Maggie you were saying, planning is so important in this. So you've given us a good idea about what good looks like could you maybe share some of, perhaps, the mistakes that employers have been making?

Maggie: I'll give a couple of examples. Not necessarily from this period, but certainly over my number of years I've been, you know, observed working with organisations. One would be not having that visible presence, as Faye was saying there as well. When people want questions answered, actually there hasn't been anyone they can turn to. And therefore often what happens is the wrong information may well get out there.

There’s 2 things. One, you've got wellbeing, so people are already potentially in a very distressed state, they're wanting to understand maybe the timeline or just needing a little bit of information on how it's going to impact them. And not being able to find anyone or any method of having their questions answered really starts to fuel incorrect information within the organisation. And also kind of 'bad feeling' as well. And it starts that process of "This isn't fair. It's not transparent and no one cares as well." So there's a real risk of not having the availability of people.

And the other one I would give an example of is a large organisation who were making redundancies, or starting to go down the route of consultation for potential redundancies. And when the team went in on a Monday morning, they went down to their positions and there were benches where they were sitting. And across every single one of them was a leaflet that said: “if you're stressed by today's announcements, then ring employment assist programme”. Now, they didn't know there was going to be a process. And that was meant from the employer side — they thought that was a helpful gesture — but actually, it wasn't at that time. In fact, it fuelled real stress within that organisation at a very early stage.

Faye: Yes, I absolutely agree. Where I've seen most ongoing harm done is where communications haven't been planned and clear. So, perhaps they've not been coordinated at senior management level and bits of information have started to leak and cause suspicion, rumours, uncertainty, bad feeling, and probably the incorrect perception that decisions have already been made and it's not fair. And then you have a resentful and suspicious workforce before you even start. So as Maggie says, it all goes back to the planning, and making sure that you've got everything you need in place before you start the process.

Sarah: And kind of expanding on that cards on the desk example, there are 3 groups of people in a redundancy process. There’s the tellers, the people who are being made redundant, and then those that stay in the workforce. What advice would you have for each of those groups on how they can look after themselves in this process, and each other, from a wellbeing perspective?

Faye: So the tellers have obviously got a particularly difficult role because they might even be at risk themselves. And they may have to be delivering some very difficult news to people they've worked with for a long time, people who've even become their friends. And in the moment of having those conversations, they have to take their own feelings out of it to give a fair process and a fair conversation to the person who's receiving the news. But they absolutely should then take some time to acknowledge what they're going through. And hopefully the company or the employer is making available to them sources of support, and has another member of staff checking in on their wellbeing as well.

And I think it's even more significant at this time, because we're not just in our workplaces, consulting and having these conversations as we normally would. We might have a workforce that's partly based back in the workplace socially distanced, partly working from home and partly furloughed. So we're looking at communicating with people in all kinds of different ways, but probably predominantly online without the usual sources of support around us. We can't just say to our colleagues, "Let me get you a cup of tea." So we've really got to acknowledge that we're in an even more taxing situation than a redundancy would normally be, and make allowances for ourselves in that.

Maggie: As part of that planning process, looking at the potential flashpoints, right the way through the stages. And I think it has helped when we talked about the teller and all the people that might be involved in it, is to make sure they understand the statutory requirements as well as what the organisation is doing. Because for the teller, this may well be and very often is the first time they've ever undertaken this process. So at every stage, it's new, and we certainly find that they're going to meet a range of emotions, as people go on that journey. And often are quite taken back of that range of emotions. And quite often, although they are the teller, they are challenged quite significantly on the decisions in quite an emotive way, because it is a very emotive time, so it can be very challenging.

So part of the prep would also be having some work with them how to deal with those difficult conversations, how to deliver, how to defuse, when to know to step back, allow a little bit of time and then come back and support people. Because actually just putting those pauses in, can make a significant difference to whether that relationship can continue in a constructive way. Or whether it becomes almost a broken relationship and then very challenging at any step of the way going forward.

Faye: Employers also need to bear in mind that once they've given notice of dismissal on the grounds of redundancy to an employee, that's still not the end of the employment for that person. They have a notice period. And it's really important that the employer does what they can to support the employee during their notice period.

And there are things that they can do to help mitigate the effects of the redundancy for those individuals who are having to go through it.

So things I've seen organisations do is try to upskill those colleagues before they have to leave. And that might be with help around CV writing, or things that they can offer that are of little cost to them: job shadowing, coaching, mentoring, and encouraging colleagues to support each other so that they can get the most on their CVs as they can before they leave the organisation.

It might also be a staged retention of benefits, continuing subscriptions of professional memberships or health insurance or anything that they can offer. Because as well as supporting the individuals that they're sadly losing, it helps show the remaining workforce that the organisation still cares about its people and still invests in its people. And that will help with the survivors of the exercise to continue to have trust in the organisation.

Maggie: And just a nod there too. If staff, you know, those impacted and have had that notice. If they've got 2 years or more service, including notice period, then actually there is an obligation for the employer to allow staff a reasonable amount of paid time off or to look for another job or do some training.

Sarah: So when we're thinking about wellbeing, there's something for each of us individually just to recognise that this is a new process for a lot of people and it's stressful, and there are lots of emotions and to give ourselves time for that.

And then for employers for each of those 3 groups, it's about supporting your tellers, giving them training in difficult conversations is one way to really help them navigate those emotions. And then supporting the people who have been made redundant through upskilling, coaching, mentoring, paid time off. Which will not only help them but will also reassure your remaining employees that you care, and that again, builds trust. And with all of that making sure that you've planned ways in advance of making yourselves available and visible to all of these groups involved. 

And it's obviously a huge topic, so we'll have to move on now. But I wonder if we can now focus on another big topic? How do you make this a fair process? We've heard a lot in the news recently about discrimination around race and there are lots of forms of discrimination. But what does that look like at the moment? And how can we avoid discrimination in this process?

Faye: So once you've consulted with the staff and looked at all the ways you can to avoid or reduce redundancies. And it's still looking inevitable, you'll get to a point where you're having to select between colleagues and that should be done on a transparent and objective basis that is consistently applied. So everybody who's in the same selection pool goes through the same process of assessment or selection and it should be on objective criteria, relevant and appropriate to the job and clearly defined. And it's also really important to be sure that they don't disadvantage any particular groups. And so be aware that there is no indirect discrimination. For example, if you look at your criteria, you have a sense check that they don't disproportionately affect anybody because of their race or their sex, for example.

But it's also really important that your managers who are going through this process are trained on equality legislation, but also have an awareness of their unconscious bias. Unconscious bias is the automatic decisions that our brains make, particularly when we're making decisions at speed or under stress. And making these difficult decisions around redundancy is exactly the time when any person is vulnerable to making decisions based on feeling or instinct. So you've got to have an absolute focus on keeping the selection criteria objective, and something that you can explain and account for.

Sarah: And if you are an employee who is being made redundant, and you have concerns about how that process has been handled, what can you do about that?

Maggie: Well, the first thing I would say is if you've got an employer representative, talk to your employer representative, talk to your trade union. Again, if there's a recognised trade union, within the organisation, they'll be involved in that process. So they can call our helpline and they will be able to kind of guide them through what they should be expecting, which areas perhaps they can look for to understand for more detail.

Sarah: As you said, Faye, people when they are doing things at speed when they're in a crisis, this is when you're most likely to make bad decisions or make decisions based on your bias. I wondered both of you, if there was one thing that you would want employers to kind of keep in the back of their mind, what would it be?

Faye: I would say, think "what do I want this organisation to be like after this process has finished?" That helps you to plan for the ongoing welfare of your staff and the structure of the organisation.

Maggie: I totally agree. It's about the future. It's about dignity. So I think probably for me would be: the future, dignity, plan, communicate. And probably communicate again, because you can always communicate more, can't you?

Faye: Yeah, communicating with staff is the most vital part of this.

Sarah: Well, thank you so much for your advice on navigating this difficult process, Maggie and Faye. I'm sure our listeners will really appreciate your insights about communication, wellbeing fair selection, and ultimately, that question of “how do I want my organisation to be at the end of this process?” What do I want it to look like in the long term?

Thank you.

Maggie: Thank you Sarah.

Faye: Thank you Sarah.

Sarah: This has been The Acas Podcast. You can find more information on redundancy and your rights on our website and I've put some direct links in the session notes for this episode, including our helpline number. If you found this podcast useful, please do like review, subscribe and share with others who could find it useful too.

Thanks for listening.