In recent weeks the Prime Minister has been bracing business owners that there will likely be “many job losses” as the country fully begins to deal with the economic impact of Covid-19. Whether this is because businesses haven’t been able to survive the lockdown or due to social distancing requirements and businesses shifting to other methods of working, the upshot is that there is a distinct possibility that many companies will now be considering redundancies.
The word redundancy is rarely a good term for any business owner and, for SMEs in particular, choosing members of your team to make redundant can be a difficult and heart wrenching process. However, it’s also important to remember that a potential economic downturn is going to mean that the working landscape is going to change, so it’s important to be prepared for every eventuality. Changes to the furlough programme are going to mean that the financial impact of keeping staff on the books, earning and not working, need to be seriously considered.
Plan ahead
For the sake of your business and your staff, you need to plan ahead and consider all the options that are available to you. Consider whether the end of the furlough scheme will create potential redundancy situations. This is vital in order to ensure that any redundancy process that you undertake is fair and fits with government guidance. Collective dismissal legislation (where over 20 dismissals are involved) requires between 30 and 45 days consultation with affected staff members.
Ensure your HR records are up to date
Making sure that your HR records are up to date and checking all staff contracts will ensure that any redundancy process that takes place is fair and runs as smoothly as possible. You should also start considering the selection criteria that you could use for deciding which members of your team should be involved in the redundancy process which is going to be objective, fair and non-discriminatory.
Consider alternative options
Now is the time to consider all your staffing options and employees may be more open to reducing their working hours or changing their shift patterns. They may have gained increased responsibilities themselves such as continued childcare and home schooling, or they may simply have decided that they want to spend more time with their families. If your business can cater to job sharing or reducing the hours of team members, have that discussion with them. With the potential of an economic downturn on the horizon, a part time job may well be better than no job at all.
Calculate the cost of redundancies to your business
Statutory redundancy payments are calculated on years’ service and age, capped at £538 per year worked. When considering laying off a part of your workforce, you must take into account that you will be liable to pay this to any employees who are made redundant. Some employees with longer service, may actually be reconsidering their work life balance and may want to take early retirement. Again, sitting down and consulting with your team members allows all of you to come to amicable decisions.
Seek professional advice
Yes, we know, we’re an HR Consultancy telling you to seek professional advice, but there’s a reason for it. Initiating a fair and considerate redundancy process can be difficult, especially when you are already trying to run or rebuild your business. Additionally, an HR Consultant can ensure that you don’t find yourself embroiled in a legal battle due to unfair dismissals and that your staff leave on good terms. The team at Dakota Blue are here to discuss any staffing issues or questions that you may have and are just at the end of the phone.