Making employees redundant should be the last option on your list when trying to reduce costs across your business. You've worked hard to recruit a great team with the skills and experience you need, so before you begin a redundancy process, it's important to consider if you have any other options to consider.
Freezing recruitment, withdrawing or deferring job offers
- If employees have left your business, instead of recruiting to replace them you could distribute their role out to other employees.
- You can withdraw job offers at any point before employment is accepted without giving notice or payment in lieu of notice.
- Any one due to join the business, you could ask to defer their employment by a specific time period i.e. 6 months.
Re-training existing employees or moving employees to another part of the business
- It might be possible to retrain employees to work in another part of your business on a temporary or permanent basis.
- You would need to agree any significant changes with each employee and make sure you put it in writing.
- If you do move employees to another part of your business, you should make sure they have the right equipment and have been offered the right training to allow them to do the new role.
Reduce non-permanent employees
- Consider ending arrangements with casual workers, agency workers or self-employed consultants to reduce cost.
- You would need to carefully consider each working arrangement to make sure they don’t legally qualify as employees with statutory rights.
- You could consider an internal secondment to another part of the business for employees to learn new skills or an external secondment to a client’s business could not only help your client’s business but also help your employee learn new skills and knowledge before returning to their original role.
- You would need to get consent from your employee before a secondment can happen but many may see it as a career opportunity and a chance to do something different.
Reduce pay, staff benefits or introduce a pay freeze
- You could consider freezing pay or ask employees to take a pay cut across the board, which might be easier if employees know the alternative is redundancy.
- Any significant changes to working arrangements is likely to involve variations in employees contracts and you should seek legal advice before doing so.
Reducing hours – flexible working arrangements, job sharing or overtime bans
- You could ask employees to make a flexible working request to reduce the days or hours they work, reducing cost. Some may welcome the incentive of a better work-life balance.
- You could also ask employees to volunteer to job share, where two or more employees split a full-time job between them. This helps to cut cost for the business without letting anyone go.
- You could stop offering overtime. Although there is no contractual entitlement overtime to begin with, you can stop offering it but you would need employees consent before doing so.
Make savings elsewhere
- How could you save costs elsewhere?
- Do you need an office as big as the one you have? If you have multiple offices, do you need all of them?
- Could you negotiate supplier contracts for goods or services to reduce the costs? Could you reduce any of your other outgoings or expenses?
After considering all of the above options, if you still aren’t able to reduce the cost you need, unfortunately you may need to consider redundancy.