How to handle making people redundant

For the 9.6 million people on furlough who are waiting to see if their jobs will be added to the almost 700,000 already wiped out by the pandemic once the scheme changes in October, this is a time of anxiety. Some employers have already jumped the gun: in August alone, Costa Coffee laid off 1,650 people, BA laid off 10,000, and John Lewis & Partners reported prospective staff cuts of 1,300.

Redundancies are stressful, both for the people leaving and for those dealing with them. Jane Smith [name has been changed], a director of marketing at a global leisure company, has recently gone through the process with both members of her team. She says putting the business first came at a high personal cost. “We were such a strong, supportive unit. My deputy was an old friend, which made things more difficult. The lead-up to the final meetings – done remotely – was horrendous. I couldn’t sleep and I felt I was betraying the friendships. I know I wasn’t, but the fact that I knew something about their future that they didn’t was extremely disquieting.”

Many managers going through what Smith went through will identify with her. Though nothing can make the process stress-free, taking certain steps can ease the strain.

Foremost of these is to be psychologically and pragmatically prepared, explains Fiona Murden, a business psychologist who works with companies such as Dr Martens, Burberry and the Institute of Directors. “It’s essential to prepare mentally, and to find a way of balancing empathy with some degree of emotional distance. Managers can’t afford to ‘catch’ the feelings of the person being made redundant. It’s more effective and healthy if they can empathise while remaining sufficiently emotionally removed to handle the process professionally.”

Andrew Willis, head of legal at employment law and HR consultancy Croner, agrees that distance is essential, even when those being made redundant are friends as well as colleagues. “Given the current situation, pressure could be intense and managers will need training and support. They must be able to remain calm and understanding; they must have all the facts to hand, so they can answer any questions without floundering; and they shouldn’t try to sweeten what could be a bitter pill with false hope. If there is no chance of employment in say another department, that must be made clear.”

Managers must also emphasise that the redundancy is not personal or performance-related, says Barry Stanton, partner at law firm Boyes Turner. “Putting it into context and explaining that the staff cuts are a consequence of X, Y and Z might soften the blow. The consultations shouldn’t be rushed – the first one really ought to be only about preparing the person and arranging to reconvene a day or two later for an in-depth conversation. Leaders should flex their approach to suit the individual but must treat everyone with respect, dignity and compassion. Even when redundancies are expected, people experience shock and loss, and allowances must be made for that.”

Though employees are not legally entitled to bring someone with them to the meetings, it is good practice to allow them to do so. Aside from that, it is best to follow redundancy procedures, which structure the consultations and minimise the possibility of misunderstandings. Among the topics to be agreed are: the leaving date; whether the severance will be the statutory minimum or enhanced; whether the employee will be able to keep company property such as a laptop or mobile; whether there is any outplacement support; and whether the employee will have to work a notice period.

Throughout the process, business leaders must listen to the person and respond fully and candidly to any concerns they raise, says Stanton. “They should demonstrate that the redundancy was the no-other-choice result and that genuine attempts were made to find alternative solutions. Some of the provisions on notice pay are complex– if managers don’t understand or know about these, it’s important they say so and arrange another meeting when those issues can be addressed.”

If the meetings are properly handled and fair redundancy procedures that implement all legal requirements followed, disputes shouldn’t arise. However, employees do have the right to appeal the decision to make them redundant and any requests to do so should be facilitated, says Willis. “All stages of the process should have been documented in writing. While disputes should be avoided at all costs, they do happen. In such cases, a more senior manager who has not been involved in the process to date will need to be brought in.”

“Loyalties will certainly be divided,” says Murden. “Managers can find themselves in a state of anxiety and emotional conflict. They may feel guilty for having kept their job or that they didn’t manage to find a way of keeping their staff.”

The best way to manage such situations is to develop what psychologists call cognitive empathy – the perfect point between empathising to such a degree that you suffer and becoming so detached that you are emotionless. The usual wellbeing heroes – good nutrition, good exercise and good relaxation techniques – also help. If you are still struggling, ask for support from HR or, if you have one, from your own line manager.

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• Business & Management magazine, Issue 288, October 2020 (p.27)

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Further reading on how to handle redundancies and terminations is available through the resources below.