Redundancy is not a process that many businesses like to put their employees through; however, sometimes the company must continue functioning at full efficiency. Several factors could influence your decision to make an employee redundant. New technology could replace their role, you decide to outsource their job, or you need to downsize your business.
Whatever the reason you need to make an employee redundant from your business, the process is always the same. Read on to find out about all of the steps necessary during this practice, and make sure that you follow each one responsibly.
Identify The Employees You No Longer Need
Sometimes, it is easy to discover which employees you need to make redundant. This often happens when a new piece of equipment is introduced, and you can prepare the individual properly for their exit. Unfortunately, downsizing or outsourcing procedures may mean that you have to pick out several individuals for redundancy. How do you know who to choose?
it may sound difficult, but any employee that is no longer going to pull their weight and cannot be relocated within the business is going to need to be made redundant. You cannot afford to keep paying employees you do not need, and these individuals do not want to spend time in a job where their skills are not utilised. Therefore, the redundancy process is beneficial to both parties.
Outplacement And Negotiations
Losing a steady income is not an ideal situation to find yourself in, which is why there is always a negotiation period during the redundancy proceedings. As an employer, you must offer your staff an incentive to take voluntary redundancy or ensure that the individual is provided for in some small way if the decision has already been made for them.
These incentives will come in the form of a severance package that is to be negotiated between you and the employee. Some companies will choose to list the details of their severance packages in their employee contracts so that the negotiation period is kept brief.
The second option for employers is the outplacement process. This procedure can help the employee find a job that utilises their skills in the same manner in another role or with another company entirely.
An outplacement provider will partner with your business, helping outgoing employees land their next job role. Not only does this help give the employees career security and reassure their income, but it can also help the business protect its brand and retain employees further down the line. You should check this guide about outplacement from experts Randstad RiseSmart, as it will explain everything you need to know about the service, including how you could implement it.
Hold A Consultation
It may be difficult to speak with an employee to offer them redundancy; however, there are certain laws in place that state that employees must be informed of any redundancy decisions within a specific time frame. This means that you must hold a consultation meeting with anyone that you make redundant.
This consultation should lay out the reason why you have had to come to your decision and answer any questions they may have about the process. They will also need to know why you cannot relocate them within the company, so be sure to inform them that you have exhausted all other options before you made them redundant.
Once you and your employee have agreed on the terms of the redundancy, it is time to draft up a formal termination notification. This letter should detail all of what you agreed to with the employee while also listing the reasons for the termination. It may be necessary to include a member of your legal team or human resources during the redundancy negotiations so that there is a third party to clarify the agreement.
However, once the consultation ends, you can solidify the agreement with this formal notification. Your employee can still refuse redundancy if they feel some of their wishes have been left out of the agreement, so it may take a bit more back and forth before you reach the final formal agreement.
Only once the employee has signed the formal notification of the redundancy can you then proceed with all termination procedures. This means removing their employee information from your databases, making any outstanding payments that are owed, and terminating their employment contract. Once the notification has been accepted, the employee can no longer dispute the agreement between you which means they are no longer a member of your staff from a legal standpoint.
It may seem like there is a lot to go through during the redundancy process, but these procedures are usually quick if everyone is transparent with their circumstances. Unfortunately, this is just one of the tougher parts of running a business. Make sure you follow the procedure correctly, and you can make the situation easier for both parties.