Redundancy alternatives better in the long run: advisor
Making employees redundant should be considered as a cost-saving solution only after all other avenues have been explored, according to HR business advisor at The Clarity Group, Greg Smith.
Leave liabilityLeave liability is the first area employers should look at to reduce their costs, Smith says.
"Annual leave can quickly accumulate to levels in excess of 100 hours. Annual leave is there for a reason: to allow us some time away to relax and re-energise, break our routines and have some fun away from work. If your staff are not taking leave they may be getting run down; productivity and morale can drop and this will only be further eroded if they see their colleagues being made redundant because times are tough."
When this happens, unplanned leave can skyrocket and the risk of workplace injuries - both physical and psychological - increases, Smith says, driving up costs in other areas of the business.
"Encourage staff to take their leave, especially if business is quiet. Communicate openly with them [about the reasons]. People are tough and you might even be surprised by their reaction once they see you are being open and your concerns are genuine."
Shorter hours"Some employees might be happy to reduce their hours in the short term, which can help the bottom line, restore some order to the balance sheet and still leave you staffed up and ready to fire when business picks up," Smith says.
"Another benefit of this approach is that staff see your commitment to them and in turn increase their commitment to you. The skills shortage is not going away and you don't want to lose some of your best workers only to find you need them again in a few relatively short months."
Recruitment freezeA recruitment freeze - where replacement hiring as well as additional headcount is put on hold - is another way to reduce costs, Smith says.
The work of leaving employees can be distributed to other members of the team (with the reasons communicated clearly and honestly), or someone in another department can be retrained or seconded in to help out where required, he suggests.
If remaining staff show signs of stress, or take more sick leave than usual, employers should look at bringing in a temp to help clear some of the backlog, he says.
It is important in this situation to acknowledge and appreciate the contribution employees make - "a little recognition can do wonders for morale".
OutplacementIf all other avenues have been exhausted and redundancies deemed inevitable, employers should consider providing outplacement services to affected staff, Smith says.
The cost of these services is often less than expected, he says, pointing out that their provision creates a sense of goodwill and respect for the organisation and can make a significant difference to an employee who has not had to embark on a job search for some time.
"What's more, when it is time to re-hire, your [employee value proposition] will not have been tarnished and you will again attract quality applicants," Smith says.