Workplace Redundancy: How to Get It Right

1. Workplace Redundancy: How to Get It Right

2. No business wants to make their staff redundant. But sometimes, even with the best business model and workforce planning efforts, unforeseen, unexpected changes can occur in the business environment that mean that the workforce that was once needed and could be afforded, now is no longer needed in its current form and can’t be afforded based on revised revenue/budget forecasts.

3. In the public sector, these changes can often be driven by changes of Government at election times, changes in the shape of Government driven by policy re-directions etc and in the private sector it can be driven by mergers and acquisitions, competitors entering the market, share price fluctuations and technological and consumer changes. However, there are ways to get redundancy right and minimise the risks to the business while still ensuring that redundant employees are treated fairly. To help employers with the redundancy process, we have pulled together a few key considerations to think about.

4. What is actually going on in the business? Some careful analysis of what is changing, what is driving it and where the impacts are being felt before launching into any redundancy program is key. Things to look at and consider include: • What is driving the change? Is it a long term or short-term issue? • Can contingency plans be put into place to build time into the decision-making process while more information is obtained about longevity and impacts (e.g. stopping/slowing recruitment, reducing overtime/work hours, etc)? • Are all parts of the business equally impacted? If not, where are the impacts and where are the ‘business as usual’ elements?

5. Can it be managed by other means? Once the problem and scope is clear, consider possible options and risks to managing the required changes to organisational shape and size. These include: • Recruitment freeze • Natural attrition rates • Contracted and casual worker profiles • Working patterns If the answer is that these considerations will only help to partly resolve or slow the pace of required further reductions in staff, then a redundancy program is likely to be needed.

6. ‘Hands Up’ vs Targeted Redundancy Options Often organisations experiencing a requirement to reduce staff numbers resort to a ‘hands up’ voluntary redundancy process. They take this route to reduce perceived potential conflict with staff as jobs are reduced, speed up the process as those who receive a redundancy are those who have expressed an interest in a redundancy and they achieve savings and reduced staffing targets at the ‘bottom line’ quickly. From our experience, the reality of this approach is that it almost always results in fixing one problem (i.e. delivering reduced across the board staff numbers and costs with minimal staff and Union angst) but often results in a range of longer term, difficult to manage problems such as:

7. Loss of key personnel – good performers with strong and marketable skills often take redundancy to realise the financial benefits knowing that they can find employment easily elsewhere; • Retention of average/lower performing staff – those staff that are not confident in their abilities to find new work if made redundant stay and don’t take up voluntary offers • Loss of capability in areas where it’s needed – a fixation on staff numbers and financial savings via voluntary processes often mean that capability gaps quickly emerge in key areas. • Loss of corporate knowledge – long term staff often have extensive corporate knowledge that they take with them when they leave – often this isn’t thought about until too late.

8. Having a robust and industrially compliant redundancy procedure As stated at the beginning of this article, no business hopes to find itself in a position where it needs to conduct a redundancy program. However, better practice risk management, HR and IR as well as the historical realities of trying to deal with a redundancy program when its thrust on an organisation, often with little warning, means that planning should be undertaken early to ensure that a robust, complaint, fair and respectful process is in place should this occur and be needed.

9. Final Word Though redundancy is a legitimate way to reduce staff numbers, making an employee or a group of employees redundant is never easy for an employer. Follow the tips mentioned above to make sure the process is fair on both your business and the redundant employee(s). HBA Consulting has advised private and public-sector organisations on redundancy management processes and programs through the provision of practical, professional and experienced HR and IR advice and assistance. At difficult times like redundancy, its helpful to have assistance that supplements existing capability in an area that isn’t often available internally to an organisation.

10. Get in touch HBA Consulting Address : : 29 Somerville St SPENCE ACT 2615, Canberra, Australia Post : PO Box 6262, O'CONNOR ACT 2602 Telephone : 02 6247 4490 Contact Email : gary.champion@hbaconsulting.com.au Website : www.hbaconsulting.com.au