How to consider and handle alternatives to redundancy in an economic downturn
Author: Lynda Macdonald
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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.
- Take care that any recruitment freeze does not place employees in an intolerable position regarding increased workload.
- Avoid cutting graduate recruitment and/or engagement of apprentices if possible, as their continued supply may be essential for the organisation's long-term competitiveness.
- Review whether or not 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 reduced hours or alternative ways of working.
- Consider reducing or stopping the use of temporary staff.
- Consider seeking agreement to a temporary reduction in the number of days/hours that staff work.
- Consider inviting employees to apply for sabbaticals on part or no pay.
- Ensure that pay cuts are implemented only where the employee has given his or her 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.