The way an employer deals with redundancy also has powerful implications for the survivors. A botched programme can leave a workforce feeling shaken and demoralised.
Rather than springing the decision on the company it is better to keep staff informed about what is going on, clearly explaining that there may be a need to downsize. Losing some people should be a means of keeping control, rather than a panic measure when all else has failed.
“Many employers leave it until far too late in the day to make decisions,” says Richard Chiumento, managing director of HR consultancy Chiumento. “By that time there is so much writing on the wall that good people are starting to leave because they can't see a future.” Keeping staff on side
Keeping staff on your side has important implications for how well the company performs in the future, Chiumento adds. “Put pounds signs on your decisions and protect what is valuable in terms of productivity and profitability,” he suggests. “That means anticipating the likely effect of everything you do, to control the destabilising effect as much as possible.”
The timing of the announcement is crucial. Many bosses get the victim in on a Friday afternoon and ask them to clear their desk because there will be no job to come back to on Monday. That means they have the weekend to brood, which experts say is the worst possible scenario.
How not to go about making staff redundant was demonstrated by a company advised by Alan Fowler, HR consultant and author of a book on the subject, Managing Redundancy. “A business run by two brothers was on the rocks,” he explains. “But instead of being open about the situation they concealed it from staff. They then suddenly pulled in two senior managers on a Friday and fired them.”
Although the redundancies were necessary, they were badly handled. “The managers were able to make a case for being unfairly treated and the case is now being heard by an employment tribunal,” he says.
If the employers had been frank about the problems and discussed it with staff before reaching a decision the outcome might well have been different says Fowler.
Another mistake is to assume that an employee will make trouble after being made redundant. The City is rife with tales of employees being made to clear their desks and then marched by security guards to the exit. Some don't even get past reception on the fateful day, but are handed a letter of dismissal and their belongings in a bin liner.
This is humiliating and completely unnecessary, Fowler insists. “There is a fear that people are going to be awkward and destructive, but in my experience that isn't the case,” he says. “Where highly confidential information is involved there may be some need for security measures, but in most cases such methods are pointless.”