A rise in the number of enquiries we have received regarding redundancies lately may be the first indication of the fact that higher interest rates are beginning to take their toll on businesses; potentially signalling a slowing of the economy. The Bank of England’s tactic to raise interest rates is designed exactly to reduce household disposal income and therefore spending, and ultimately inflation. The downside will always be that some businesses suffer.

Of course, higher interest rates are a double whammy for businesses that also rely on borrowing, as those costs automatically rise too. Most affected businesses will have already taken steps to cut costs and so further savings are likely to be at the expense of jobs.

Making the decision to cut jobs is a tough call. Nobody wants to put people out of work, but if a business is lean and streamlined in every other area, then job losses might be the only option to ensure its longer-term survival; hopefully putting the business in a position from which it can regrow and rebuild.

When job cuts are unavoidable, organisations have legal responsibilities and guidelines to adhere to of course. Getting the process wrong could lead to a tribunal claim and having to pay a hefty award to an ex-employee defeats the object of the whole, cost-cutting exercise.

Job losses usually start with those who have less than two years’ service as immediate cost implications are minimal, however we should still ensure that a fair, transparent and reasonable process is followed. This doesn’t necessarily mean that those with shorter service are the least valuable they may be cheaper to lose but could cost you competitive advantage if they have the skills that you require for the future, so keep your selection process considered.

Where redundancies are involved we must remember is that it is positions that are made redundant and not people. Therefore, where a position or job role is identified as being redundant and more than one person is currently employed to fulfil it, implementing a fair selection process, coupled with the appropriate consultation period for the numbers being made redundant, is non-negotiable. The same role may be carried out at different sites so potentially all of those employees may have to be put in the redundancy pool.

We recommend a ‘selection matrix’ scoring system for those employees who are to be put at risk of redundancy. Points are awarded for each requirement of the position in question such as relevant skills, qualifications, track record and experience. This takes some of the emotion out of the process, providing a more statistically derived result.

The scoring could include minus points for poor sporadic attendance and any history of disciplinaries, so your most committed staff stand the better chance of keeping their jobs. The lowest scores are those who are dismissed. One should of course always be mindful of attendance issues that could be associated with a protected characteristic.

As a guide to help steer you clear of some common redundancy pitfalls, here is a list of key considerations. However, if a restructure looks like it’s on the cards however, you should speak to us for specific and more detailed support:

• Give full and careful consideration to your business case rational and which employee groups are at risk
• It is not an easy process for you or your staff, so getting the communication strategy right, including a consistent message, cannot be overstated
• Remember it is always the position that is at risk of redundancy, never the person
• You’ll need to formally open a consultation for two to three weeks. Longer if more than 20 jobs are at risk
• Design a fair and transparent selection procedure that stands up to scrutiny
• Conduct meaningful 1-2-1 meetings; preferably face to face and if your using technology, find a platform that allows this
• Employees have a right to request representation at all 1-2-1 meetings. This can often be helpful for both parties
• Once consultation is closed and you’re giving formal notice of dismissal hearings, be sure to follow the correct procedure including adequate notice, the right to representation and the right of appeal
• You don’t have to have all the answers on the spot. It’s OK to come back later
• Keep notes of all discussions with staff, and send confirmation

If redundancies look inevitable, we recommend that you don’t delay. Putting off those tough decisions will mean your business continues to lose money making it less sustainable for employees who remain. By acting quickly, you’ll also avoid the stress that is caused by uncertainty.

We have a redundancy pricing matrix structure available here, so you can see the potential costs in engaging us to support you should the need arise. We also have a range of documents available in our toolkits.

We're available to provide support at various levels and as we mentioned, if redundancies look inevitable, don't delay. Call us on 01452 331331, or e-mail This email address is being protected from spambots. You need JavaScript enabled to view it.