How to consider alternatives to redundancy in an economic downturn

Author: Lynda Macdonald

Summary

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• Consider the high costs of making people redundant, including the "hidden costs".
• Appreciate that employers that cut staff numbers during an economic downturn may be ill-equipped to take advantage of future opportunities.
• Make sure that you enter into constructive dialogue with your employees at an early stage about any proposals for cost-cutting measures.
• Consider seeking agreement to a temporary reduction in the number of days/hours that staff work.
• Check if there is a contractual right to implement a lay-off or short-time working.
• Take care that any recruitment freeze does not place employees in an intolerable position regarding increased workload.
• Review whether any new vacancy can be filled by redeploying an existing member of staff, with appropriate retraining where necessary.
• Review overtime to see if it can be reduced or stopped altogether.
• Invite staff to volunteer for alternative ways of working.
• Consider reducing or stopping the use of temporary staff.
• Consider inviting employees to apply for sabbaticals on part or no pay.
• Ensure that pay cuts are implemented only where the employee has given their express agreement.
• Take care that cuts in bonus payments do not amount to a breach of contract.
• Do not overlook possible ways of reducing overhead costs.