Possible Alternatives to Redundancies – Our Top ten tips for Employers

In these still uncertain economic times, many employers may experience financial difficulty. They might be considering potential ways to reduce costs.

Redundancy is a tried-and-true method for reducing costs and staff. But what if you wish to avoid the demoralising impacts of forced layoffs while yet keeping your valuable, competent, and experienced personnel on board? It’s possible that your business is in a “slump,” but you don’t think it will last very long, or that a change in strategy hasn’t yet shown benefits.

The top ten suggestions, which include some alternatives to layoffs and suggestions for how a company can reduce expenses while striving to avoid forced layoffs, are displayed below.

Alternative to redundancy: 10 ways for an employer 

1. Employer may limit external hiring

Whenever possible, try to avoid replacing workers who leave the company. Consider whether you can fill gaps by distributing work among current employees or by allowing internal applicants when announcing job positions.

2. Many employers limit or prohibit overtime

This can be a useful cost-cutting strategy if overtime is not necessary due to the nature of the company. However, employers would have to adequately inform staff members that restricting or regulating overtime is a strategy to avoid being forced to perform forced layoffs. When dealing with employees who are accustomed to receiving extra pay for working overtime, employers must exercise special caution.

3. Repositioning and retraining

If one area of the business is busier than another, a worker with transferrable skills may be retrained to perform a different job on a temporary or long-term basis. It might also be possible to undertake a restructure without having to eliminate any employment by redefining present positions in accordance with work expectations. The appropriate staff must sign off on any major changes in writing. Any employees who have been redeployed must also undergo training to make sure they are qualified for the new position.

4. Job-sharing

Employers could ask for volunteers to share jobs. With this arrangement, two (or more) employees can agree on additional terms and each work a full-time job.

 5. Unpaid leave of absence, career interruptions, and secondments

Unpaid sabbaticals and career breaks can be a great way to keep key staff on board, lower wage costs for a certain period of time, and provide them the option to follow their own interests through volunteer work, study, or travel. Similar to this, internal or client secondments can be efficient means to train an employee in a specific sector or provide a client with a specific service. When the individual returns to their previous position, this might help to improve client interactions and/or broaden their knowledge and skills, which would benefit the employer’s operations.

6. Requests for flexible work schedules – reducing hours or days worked

 In an effort to reduce the amount of hours or days they work, employees may be asked to request flexible scheduling. A temporary or permanent reduction in the number of hours or days worked by a certain group of employees may also be considered by the employer. To lessen the risk of a contractual breach and/or claims of constructive dismissal, it would be required to obtain employee approval.

7. Retiring early

By allowing early retirement, the organisation may experience openings that are later filled by employees who may have been laid off.

8. Save money in other areas.

Before implementing mandatory layoffs, employers should carefully consider how budgets may be reduced and costs may be saved in other divisions of the company. Can spending on clients or entertainment be reduced, for example? Can contracts with suppliers of goods and services be changed to save expenses? Can other expenses and prices be reduced as well?

9. Purchasing extra yearly leave

Giving employees the choice to take additional vacation time in exchange for a pro rata salary reduction can help employers save some money when business is slow. However, this agreement’s contents would need to be set forth in writing.

10. Voluntary layoffs

Redundancy applications are ‘optional’ to submit. In the long run, making voluntary redundancies more common may reduce the need for forced ones.
To protect the employer, care must be taken, the right method must be followed, and the agreement must be carefully documented with reference to all of the aforementioned possibilities.
If the necessary cost savings are not realised after considering the aforementioned proposals, mandatory layoffs may need to be taken into account. To learn more, contact us at 0808 178 7292