Avoiding aftershocks when making redundancies

In March 2023, Womble Bond Dickinson surveyed 500 employers, employing over 50 people, responses came from business owners, leaders, and senior HR professionals. Over two fifths (42%) of employers said they were planning to make redundancies in a year that has already seen a string of high-profile companies announce job cuts.

The UK workforce and corresponding workplaces have been hit by an earthquake of change in recent years following the adoption of remote working during the pandemic. But as most HR professionals will tell you, change was already happening pre-pandemic and younger generations have significantly different expectations and attitudes towards employment.

The pace of change isn’t slowing either, the UK’s workforce is still in a state of flux with trends like the great resignation, skill shortages, the cost-of-living crisis, the introduction of AI, and post Brexit trade all taking hold.

In March 2023, 500 employers, employing over 50 people, were surveyed*, responses came from business owners, leaders, and senior HR professionals. Over two fifths (42%) of employers said they were planning to make redundancies in a year that has already seen a string of high-profile companies announce job cuts.

Evidence shows how these redundancies are handled can have a huge impact on the individual made redundant, the colleagues left behind, and the reputation of the business, never mind associated costs.

A study conducted by people analytics firm Visier found that employees are 7.7% more likely to leave following an involuntary resignation within their team. This pattern known as ‘turnover contagion’ where one employee leaving causes others to follow highlights the social nature of employee resignations and the influence they have on their peers.

Businesses who have a well thought through redundancy strategy and plan can mitigate the possibility of losing talent this way, and avoid other common pitfalls associated with making redundancies.

Reputation, reputation, reputation
There are significant PR risks that need to be considered when managing a redundancy process. How the redundancy process is communicated to employees can have a big impact on their morale and overall perception of the company. Poor communication or lack of transparency can lead to feelings of uncertainty and mistrust among employees and public perception can plummet if the company is seen as callous or insensitive towards its employees. A carefully-planned communication strategy can help a company avoid reputational damage and the subsequent loss of employees or clients. This includes clear and timely communication with employees about the reasons for redundancies and how they will be carried out.

Transparency is also key during this process to maintain trust and mitigate negative perceptions. It is also important to consider how the news will be communicated externally to stakeholders and the public. A carefully crafted message that demonstrates empathy towards affected employees while highlighting any positive aspects, or future plans, can help protect the company’s reputation.

In addition to effective communication strategies, organisations should also focus on supporting affected employees during this challenging time. Offering career transitioning support, also known as outplacement services, such as retraining opportunities or severance packages can help alleviate some of the negative impacts on employee morale and improve public perception too.

Lastly, monitoring public sentiment through social media listening tools or engaging with media outlets proactively can help address any concerns or misconceptions that may arise during this period, and monitor how ex-employees are talking about the company online.

Managing the risks – social media
In today’s digital age, social media has become an integral part of our personal and professional lives. However, when it comes to redundancy situations, there are certain risks associated with social media that organisations should be aware of. It is important to understand these risks and take necessary precautions to avoid any potential negative consequences.

Common social media risks associated with redundancy include confidentiality breaches, damage to reputation, and associated legal implications. If a business is facing any of these risks as a result of social media activity it is important to act immediately. This could include deleting or editing inappropriate posts, collecting evidence for further action, and familiarising yourself with the differences between comments that are defamatory, a breach of contract, or a breach of confidentiality.

If there has been a disclosure of personal data, investigating whether there is a requirement to report the personal data breach is important, and if you are unable to identify the author of the negative comment, you can contact the social networking site and request further information. You may need to consider bringing disciplinary action and, or civil proceedings against an employee, but where the comment is defamatory, the employee may be able to justify it and successfully defend a civil action.

It’s worth noting that if you bring a civil claim of defamation against a social networking site, the site may plead the defence of “innocent dissemination”.

Always consider each case on its facts and consider the costs and time associated with bringing civil proceedings. Given the ever-changing nature of the digital landscape all businesses should review their social media policy at regular intervals or introduce one if it doesn’t yet exist. If the social media risk has escalated into a legal issue, it’s worth consulting with legal professionals who specialise in employment law.

Supporting workforce wellbeing – past and present
Redundancy can have a significantly negative impact on an individual’s wellbeing and the research from people analytics firm Visier’s highlights that how close employees are increases the likelihood of knock on effects. Their report Turnover Contagion is Real shows how the size of a team plays a significant role in the intensity of ‘turnover contagion’ based on the tight-knit relationships. The research found that employees working in teams of 3 to 5 are 12.1% more likely to resign after a team member quits, compared to 14.5% for teams of 6 to 10.

Employers can play a crucial role in minimising the aftershocks of redundancy. One of the ways they can support employees during this challenging time is through offering outplacement services, which are designed to assist individuals who have been made redundant in finding new employment opportunities. Typically, they would focus on career coaching, job search assistance, CV writing and interview preparation. By providing these services, employers help their former employees navigate the job market and increase their chances of securing new employment. This not only benefits the individuals but also enhances the employer’s reputation as a responsible and caring organisation.

Offering access to counselling or mental health resources can also be beneficial for those struggling with the emotional toll of redundancy.

When faced with redundancies, employers should prioritise supporting their employees’ wellbeing and by doing so they demonstrate empathy and build trust with employees past and present. They also protect their relationship with clients, customers, and the public.

*Womble Bond Dickinson

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