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The golden rules for making redundancies

Author: ICAEW Insights

Published: 03 Nov 2022

Dismissing employees is an art, not a science. Some bosses have mastered it well; others fail abysmally and – thanks to social media – very publicly. We consider six things to avoid when delivering bad news.

Don’t act without prior warning

Keep a record of each step in the process to ensure the employee understands it and to avoid facing legal action.

Simon Gray, Head of Business, ICAEW, says: “Making the decision to let a member of staff go should never be taken lightly. How you handle the situation says much about your organisation and can impact its reputation. Sometimes things don’t work out and it’s time to part company, but this decision shouldn’t come as a surprise.” 

Setting clear and measurable objectives, and ensuring an employee has a clear expectation of their role and responsibilities – supported by timely reviews – is essential. This gives staff the best chance of success, identifies training needs early on and, if things don’t work out, provides a clear audit trail as to why.

Don’t announce job losses on a group video call

UK law requires employers to clearly set out redundancy procedures in order for a dismissal to be fair. An initial announcement can be made to inform employees that they are at risk of redundancy, but then leaders will need to build a robust business case and fully involve employees throughout the process.

Don’t announce redundancies on an organisation-wide Zoom call or WhatsApp. It is never good to deliver bad news, but you can at least make sure staff feel secure and safe when they receive that bad news.

Amanda Trewhella, Employment Director at solicitors Freeths, says: “There may be times when it is not physically possible to meet face to face, but this should always be the aim of managers. Ensuring the message is communicated in the most human way possible, in person, will help to soften the blow of what is always a difficult message to convey.”

Don’t sack staff remotely

Since the pandemic, hybrid or even full-time remote working have become commonplace. However, although staff may be working away from the office, remote communication of a planned redundancy might not be the best course of action. In a face-to-face meeting you can look an employee in the eye and explain the reasons.

Kate Palmer, HR Advice & Consultancy Director at Peninsula, says: “There’s never a good time to make redundancies. And given that many employees now work remotely or overseas, conveying such messages over Zoom or WhatsApp may be understandable. However, you have to consider the moral perspective too. This type of communication could easily be interpreted as cold and impersonal, leaving the business open to reputational damage. 

“Employers can avoid this by asking their employees how they want to be communicated with and by taking into account individual circumstances; those who carry out all their working hours from home, for example, may prefer consultation meetings to be held by video call.”

Don’t have a drawn-out meeting

Having to make someone redundant is one of the most difficult experiences for any business leader. Even when the business case is clear, telling an employee that they will no longer be gainfully employed in your business is a tough call.

Rod McMillan, Marketing Manager at recruitment website Monster UK, says: “Plan your script and stick to it. Be professional but kind. Don’t use euphemisms. Use clear language that can’t be misconstrued.” 

To ensure dignity for both parties, keep the meeting short and to the point. Make sure you have a clear agenda, that the employee is fully briefed on the process and that they know where to go if they have further questions once the bad news has sunk in.

Chris Goulding, Managing Director at specialist HR, finance and accountancy recruitment firm Wade Macdonald, says: “In the modern world, particularly where frequent job-hopping is far more prevalent than it was 20 years ago, workplace relationships are vitally important. The reality of owning or leading a company is that people will pass through – these are the uncontrollable ebbs and flows of running a business. But what leaders and HRs can control is the protocol, particularly in sensitive situations where an employee is let go.” 

Avoid parting on bad terms

The world is small and it’s possible that you will meet the employee again in a different organisation. Moreover, as a boss you’re a representative of the business so you need to act accordingly. Be polite, calm and positive.

ICAEW’s Gray says: “Prior to joining ICAEW as Head of Business, I ran my own recruitment company and had to let several people go. I would always do this in person and away from the office on neutral ground – this is not something you should ever do by text, or indeed other digital mediums. A good leaver is an advocate for your business, and you never know when your paths may cross again.”

Freeths’ Trewhella agrees. “Companies should consider the way they treat their staff at the end of employment as much as they do during the recruitment stage, as these are actions that an employee will remember and can affect the company’s reputation as an employer.”

Remember those left behind

Dr Washika Haak-Saheem, Associate Professor, Human Resource Management, Henley Business School, says empathy is vital: “Show empathy. Be a good listener and offer help. Talk to the team to minimise the risks of rumours and gossip without revealing any confidential information.”

Many of those who retain their jobs will be losing a friend and colleague, and can become aware that they may also lose their job one day. It’s important to communicate the reasons for job losses and future company strategy to keep staff on side and focused.

Goulding says: “Beyond how you treat the actual employee being dismissed, don’t forget about those left behind. It is vital that the dismissal is not perceived by other employees to be poorly or unfairly handled, otherwise you could risk causing irreparable damage to your relationships with the rest of the team. Not to mention that it could bring down staff morale.” 

Remember that people talk. Publicly bad-mouthing the dismissed employee or making jokes will generate a sour atmosphere among your staff.

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