Redundancy tips for employers

December 30, 2008
Redundancies are difficult for employers, and one mistake may result in severe consequences, financial or otherwise, for the organisation. Here are some top tips in partnership with jobs board and Insala on tackling redundancy situations. View published articles on
  • Establish an objective plan and identify your talent - first review your business goals and document why redundancies are needed for genuine operational reasons. Establish an objective plan for targeting positions to be made redundant. Determine the skills required within your workforce, then work with managers to identify areas where redundancies make the most sense, ensuring that top performers are identified, retained, and redeployed if necessary.

  • Know your legal obligations - review your selection criteria ensuring they are objective and non-discriminatory to protect your organisation from unfair dismissal claims. Make sure employees are terminated because their job is no longer needed versus other reasons such as personality, conduct, poor performance, or a disability. Consult legal counsel to ensure your redundancy plan is in compliance with labour laws.
  • Offer career transition services - make arrangements early in the process for outplacement consultancy support to begin immediately upon termination. Such services assist employees with determining skills/strengths, writing CVs, sourcing career opportunities, networking, interviewing and negotiating opportunities. Offering such support communicates a powerful message to both the redundant employees and those staying - that you care about them.

  • Communicate honestly, consistently and personally - Keep in mind that it is much safer to over-communicate than under-communicate. Be honest, stick to the facts and be prepared to explain consistently why certain decisions have been made. Never use email to communicate a redundancy, always do this in person. Conduct individual meetings with affected employees, including their manager and a HR staff member. Keep the meeting short and to the point, focusing on fact the termination is due to business reasons. Communicate the reason for the redundancy, the process undertaken, timetables and goals for the future.

  • Train and support your managers - delivering the news that one's job has been made redundant is very difficult. Make sure managers charged with this task are appropriately trained and can articulate the reason for the redundancy; they often are your first line of defence for dispelling rumours. Ensure your managers are prepared for the variety of reactions and emotions they will encounter. Prepare managers to answer basic questions regarding redundancy payment, benefits, notice periods, outplacement support, and exact next steps.
  • Be compassionate - realise that losing one's job often has devastating effects. Although you can't change the outcome and give them their job back, you can soften the blow by treating them with dignity and respect.

  • Engage and retain your remaining employees - the aftermath of a redundancy can be riddled with declining morale, productivity and loyalty among those remaining. You can prevent such declines by taking some proactive steps. Communicate clearly and honestly why the redundancies were necessary and let them know how their jobs will be affected, i.e. changing responsibilities, workloads, redeployments and training. Reassure them that their jobs are secure (assuming that is the case), or at a minimum that you will continually communicate any upcoming changes. Be positive about the future of the company.

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