Redundancy January 2010


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One day workshop for a manufacturing business in Liverpool, aimed at both the HR team and line managers

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Redundancy January 2010

  1. 1. Managing a redundancy programme<br />by Fluid <br />January 2010<br />
  2. 2. Contents<br />3-4 Introduction to Fluid<br />5-6 Identify fair criteria<br />7-8 Selection of individuals<br />9-11 Communication<br />12-13Alternatives to redundancy<br />14-16 Avoiding redundancies<br />17-18Mitigating the damage to morale <br />19-20 Rebuilding trust and engagement<br />21-23 Discrimination<br />24-25Calculating the cost of redundancy<br />26-27Preventing the tarnishing of the employer brand <br />28-29 Keep outgoing employees happy<br />30-31 Steps taken to minimise compulsory redundancies<br />32-33 Handling the process<br />34-35 Factors influencing redundancy decisions<br />36-37 Exercise A<br />38-41 Advice for individuals being made redundant<br />42-45 Survivor syndrome<br />46-47 Exercise B<br />48-49 Case studies<br />50-51 Conclusion and questions<br />
  3. 3. Page 3<br />Introduction<br />
  4. 4. Page 4<br />Introduction to Fluid<br />Fluid Consulting Limited (Fluid) is a specialist human resources consultancy headed by Tim Holden MCIPD <br />10 years in banking<br />10 years in Human Resources consultancy<br />Fluid trading since 2006<br />The core services provided by Fluid are:<br /><ul><li>Retention
  5. 5. Selection</li></ul>- Attraction<br />- Remuneration & Reward <br />- Outplacement<br />- Training & HR consultancy<br />
  6. 6. Page 5<br />Identify fair criteria<br />
  7. 7. Page 6<br />Identify fair criteria<br /><ul><li>Employers need to act and be seen to act objectively, to ensure employees are treated as fair as possible
  8. 8. Identify the pool of employees from which the people to be made redundant will be chosen
  9. 9. Decide on objective criteria for selection, which ensures those involved are chosen fairly
  10. 10. Decide who should be made redundant as a result of applying the criteria to all the possible employees affected by the redundancy</li></li></ul><li>Page 7<br />Selection of individuals<br />
  11. 11. Page 8<br />Selection of individuals<br /><ul><li>It should never be the case that the redundancy process is used as an excuse for the dismissal of ‘problem employees’
  12. 12. Disciplinary matters should be addressed directly via the disciplinary route
  13. 13. An employer in a position where the employee should be dismissed for an issue such as misconduct should avoid the temptation to label it as redundancy</li></li></ul><li>Page 9<br />Communication <br />
  14. 14. Page 10<br />Communication 1 of 2<br /><ul><li>Failure to consult individual employees virtually guarantees a case for unfair selection
  15. 15. Consultation is an easy and necessary requirement to fulfill and in some cases can provide helpful alternatives
  16. 16. Where more than 20 redundancies are proposed there are specific requirements to consult laid down by law
  17. 17. In all redundancy cases there is an obligation to consult directly with the individuals involved</li></li></ul><li>Page 11<br />Communication 2 of 2<br /><ul><li>COLLECTIVE REDUNDANCY CONSULTATION
  18. 18. Must start as soon as a strategic direction that compels an employer to contemplate or plan for job cuts has been taken
  19. 19. The point at which that duty begins is not straightforward
  20. 20. An employer that clearly intends to make redundancies must enter consultation with an open mind on avoiding or reducing job cuts and mitigating the consequences of those redundancies</li></li></ul><li>Page 12<br />Alternatives to redundancy<br />
  21. 21. Page 13<br />Alternatives to redundancy<br /><ul><li>The whole point of the consultation process during redundancy is to try and avoid dismissal altogether, or to reduce its impact
  22. 22. Employers need to consider representations and suggestions that are made, alternative positions in the organisation and alternatives to redundancy altogether</li></li></ul><li>Page 14<br />Avoiding redundancies<br />
  23. 23. Page 15<br />Avoiding redundancies 1 of 2<br /><ul><li>Plan ahead
  24. 24. Stop hiring
  25. 25. Cut overtimes
  26. 26. Target temps
  27. 27. Look for volunteers
  28. 28. Discuss it
  29. 29. Redeploy
  30. 30. Take a break</li></li></ul><li>Page 16<br />Avoiding redundancies 2 of 2<br /><ul><li>Seek volunteers
  31. 31. Trim hours, not jobs
  32. 32. Share the wealth
  33. 33. Get temps in
  34. 34. Don’t be shy of retiring</li></li></ul><li>Page 5<br />Mitigating the damage to morale<br />
  35. 35. Page 6<br />Mitigating the damage to morale<br /><ul><li>Be prepared
  36. 36. Getting the message across
  37. 37. Provide support</li></li></ul><li>Page 19<br />Rebuilding trust and engagement<br />
  38. 38. Page 20<br />Rebuilding trust and engagement<br /><ul><li>Input and commitment from the top is essential
  39. 39. Talk, listen and be available
  40. 40. A chance to re-invigorate</li></li></ul><li>Page 21<br />Discrimination<br />
  41. 41. Page 22<br />Discrimination 1 of 2<br /><ul><li>AGE
  42. 42. Need to use a variety of different criteria to select employees to be made redundant
  43. 43. Selection criteria should not disproportionately affect one particular age group
  44. 44. Length of service should not be the sole or main criterion
  45. 45. Using length of service as one criterion in a balanced selection policy is unlikely to breach the age regulations</li></li></ul><li>Page 23<br />Discrimination 2 of 2<br /><ul><li>GENDER
  46. 46. Women are susceptible to sex discrimination when made redundant due to the way employers often view family-friendly policies
  47. 47. Non-discriminatory selection criteria for redundancies can help employers avoid sex discrimination claims
  48. 48. An employer directly discriminates against a female employee if they treat her less favourably than a male counterpart and that the difference is on the grounds of her sex; and if they apply a practice, provision or criterion to all employees, which puts women at a disadvantage in comparison to men</li></li></ul><li>Page 24<br />Calculating the cost of redundancy<br />
  49. 49. Page 25<br />Calculating the cost of redundancy <br />CR=nR+xH+xT+ny(H+T)+Wz(P-n)<br />CR, total cost of redundancy<br />n, number of people being made redundant<br />R, redundancy payments<br />x, number of people subsequently hired<br />H, hiring costs<br />T, induction/training cost<br />y, percentage quitting post-redundancy<br />W, average monthly salary<br />z, % reduction in output per worker caused by lower morale<br />P, number of people employed prior to redundancies <br />
  50. 50. Page 26<br />Preventing the tarnishing of the employer brand<br />
  51. 51. Page 27<br />Preventing the tarnishing of the employer brand<br /><ul><li>Consider the alternatives
  52. 52. Communication is critical
  53. 53. Tips for managers</li></li></ul><li>Page 28<br />Keep outgoing employees happy<br />
  54. 54. Page 29<br />Keep outgoing employees happy<br /><ul><li>Be impartial
  55. 55. Be sensitive
  56. 56. Employee behaviour
  57. 57. Manager’s observation
  58. 58. Behaviour reinforcement</li></li></ul><li>Page 30<br />Steps taken to minimise compulsory redundancies<br />
  59. 59. Page 31<br />Steps taken to minimise compulsory redundancies<br /><ul><li>Natural wastage/freezing posts
  60. 60. Reducing use of agency and contract staff
  61. 61. Voluntary redundancies
  62. 62. Redeployment/retraining
  63. 63. Early retirement
  64. 64. Flexible working patterns
  65. 65. Short-time working/reduced overtime
  66. 66. Use of secondments
  67. 67. Pay cut across the board
  68. 68. Pay freeze across the board</li></li></ul><li>Page 32<br />Handling the process<br />
  69. 69. Page 33<br />Handling the process<br /><ul><li>Document ‘fair’ reason
  70. 70. Justify selection criteria
  71. 71. Don’t discriminate
  72. 72. Consult employees
  73. 73. Build a flexible timetable
  74. 74. Gather ideas
  75. 75. Adhere to procedures
  76. 76. Look at employment options
  77. 77. Air any grievances early
  78. 78. Check contracts</li></li></ul><li>Page 34<br />Factors influencing redundancy decisions<br />
  79. 79. Page 35<br />Factors influencing redundancy decisions<br /><ul><li>Reorganised working methods
  80. 80. Reductions in budget/cash limits
  81. 81. Improved competitiveness/efficiency/cost reduction
  82. 82. Plant/office closure
  83. 83. Lack of demand for products/services
  84. 84. Merger/acquisition
  85. 85. Automation/mechanisation/new equipment
  86. 86. Relocation of work overseas for example offshoring</li></li></ul><li>Page 36<br />Exercise A<br />
  87. 87. Page 37<br />Exercise A<br />
  88. 88. Page 38<br />Advice for individuals being made redundant<br />
  89. 89. Page 39<br />Advice for individuals being made redundant 1 of 3<br /><ul><li>Decide whether to work out the notice period
  90. 90. Seek written explanation of how the package as determined
  91. 91. Check whether there is a pay in lieu of notice clause in the contract
  92. 92. Know which elements in the package are tax-free
  93. 93. Try and negotiate additional benefits</li></li></ul><li>Page 40<br />Advice for individuals being made redundant 2 of 3<br /><ul><li>Believe in oneself
  94. 94. Involve friends and family
  95. 95. Investigate retraining
  96. 96. Check the finances
  97. 97. Restructure one’s day
  98. 98. Keep socially active
  99. 99. Set targets
  100. 100. Develop a sense of purpose
  101. 101. Look after oneself
  102. 102. Boost the self-image</li></li></ul><li>Page 41<br />Advice for individuals being made redundant 3 of 3<br /><ul><li>Replace ‘should’ with ‘could’
  103. 103. Accept constructively what has happened
  104. 104. Take risks
  105. 105. Make use of facilities offered
  106. 106. Take control financially
  107. 107. Don’t keep the redundancy a secret
  108. 108. Spend time on a concise and honest CV
  109. 109. Look at one’s life
  110. 110. Plan the ideal job-go out and find it!</li></li></ul><li>Page 42<br />Survivor syndrome<br />
  111. 111. Page 43<br />Survivor syndrome 1 of 3<br /><ul><li>Why him or her?
  112. 112. Why not me?
  113. 113. Why not him or her?
  114. 114. More for less
  115. 115. Fewer opportunities for advancement as the organisation contracts in size
  116. 116. Budgets slashed</li></li></ul><li>Page 44<br /><ul><li>Ensure employees are told that their roles are being considered for redundancy in the most sensitive and respectful way possible
  117. 117. Make the communication clear
  118. 118. Equip managers with the skills to have potentially difficult conversations about changes in the workplace
  119. 119. Provide a second opportunity, possibly the next day, for one-to-one conversations
  120. 120. Support any conversations with written materials that employees can look over at their leisure and share with friends and family</li></ul>Survivor syndrome 2 of 3<br />
  121. 121. Page 45<br /><ul><li>Be as transparent as possible
  122. 122. Consider bring in third party assistance to provide specialist support from employees, some of whom could be boomerang hires in the future
  123. 123. Provide space in the workplace for employees to meet with coaches and careers advisors
  124. 124. Allow employees time during the working day to prepare for a new role
  125. 125. Don’t forget those left behind, because whilst they may be relieved to escape redundancy they will feel unsettled seeing colleagues go-taking care of those leaving will reduce the impact on those who remain</li></ul>Survivor syndrome 3 of 3<br />
  126. 126. Page 46<br />Exercise B<br />
  127. 127. Page 47<br />Exercise B<br />
  128. 128. Page 48<br />Case studies<br />
  129. 129. Page 49<br />Case studies<br />
  130. 130. Page 50<br />Conclusion & Questions<br />
  131. 131. Page 51<br />Conclusion<br />Summary<br />Questions<br />