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Alternative Options to Redundancy

Updated: Jun 14, 2022

As we continue through these uncertain times, we know that more and more businesses are going to be faced with the reality of having to make redundancies.

As the furlough scheme winds down and we look set to face further Covid-19 restrictions, as a business owner you may be starting to feel rather overwhelmed with what to do next.

Redundancy is naturally the first thing we consider when looking to cut costs, but did you know that there are several options you can take into consideration before resulting in making an employee redundant?

Read on to find our top tips setting out alternative ideas to redundancy and how you might be able to effectively cut costs during these financially testing times.

Restructure and retrain staff wherever possible

Think about how you can move things around within the business to free up certain departments and particular positions.

By carrying out a restructure of the organisation you may be able to redefine existing roles to fall in line with your current work demands and needs.

One area of the business may be busier than another and by retraining an employee with transferable skills you may be able to put them into a new role on either a temporary or permanent basis.

Please note that any changes you make will have to be agreed in writing.

Offer Job Shares

Offering job shares to your employees will mean that two people can split a full-time job between them. This is an effective way to cut costs for the business without letting anyone go but the employees must enter into agreement regarding hours and/ or days of work and the split of roles and duties.

Bring in Flexible Working Hours

This is a good opportunity for you to invite your employees to make flexible working requests with a view to reducing their hours or number of days per week.

You could also look to reduce the hours or days worked for a certain group of employees on a temporary or permanent basis. Using phases to work out new flexible working hours can be a successful way of cutting costs, but this must be dealt with carefully and with consideration to the employee.

The employee must consent to the changes made to avoid claims of breach of contract or constructive dismissal.

Make savings across the whole business

This may seem obvious, but it is important that you look to all areas of the business to cut costs. Areas to consider could include client entertainment budgets, contracts with suppliers of goods and other external services or expenses and outgoings that aren’t currently necessary.

Ask your employees for ideas too as they may be able to think of some things that you haven’t already considered.

Restrict overtime wherever possible

This is a quick and easy way to cut costs, but you must make sure that your employees understand your reasons for doing it as they may have come used to the additional income.

Voluntary sabbaticals or secondment

Voluntary sabbaticals, career breaks and secondments are a great way to save money but also mean you can secure your talented staff and allow them to go away and do something valuable for themselves.

Early Retirement

This is one way to create space which can be taken up by an employee who may have been a consideration for redundancy.

Purchase additional annual leave

This is one way that employees can take extra holiday in exchange for a pro-rata reduction in their salary which will in turn save the business some money.

Just make sure that the arrangement is set out clearly in writing and documented.

Voluntary Redundancy

Don’t overlook the option to propose voluntary redundancy to your employees. Ultimately, offering a voluntary redundancy package might reduce the need to make compulsory redundancies and that after all is what we are hoping to achieve.

Once you have taken all the above points into consideration, and if you still need to make redundancies then it is important that you take the correct steps to comply with fair redundancy procedures.

If you would like help with your redundancy process, then we can help. Whitcombe HR can provide you with redundancy procedure templates as well as bespoke advice and guidance suitable to your business.

To find out more simply email or call 07534 359255.

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