Rethinking Redundancy – Smarter Alternatives for Employers

Making redundancies is never easy. The financial cost, the emotional toll on your team, and the long-term impact on morale and reputation all need to be considered carefully. But what if there was another way?

More often than not, there is. HR teams and business leaders can take a creative approach to cost-saving measures that protect both people and the bottom line.

Alternatives could include: 

1. Voluntary Redundancy This gives employees a say in their future and can soften the blow for both sides. Be transparent about the terms and retain discretion to decline applications from those in critical roles.
2. Changes to Terms and Conditions Reducing hours or pay, by agreement, can help manage costs. If consensus can’t be reached, "fire and rehire" may be an option of last resort – but proceed with caution and keep an eye on the Employment Rights Bill. For now, non-compliance with the new statutory Code of Practice (Code of practice on dismissal and re-engagement issued by the Secretary of State under section 203 of the Trade Union and Labour Relations (Consolidation) Act 1992 (HTML version) - GOV.UK) could result in legal claims and compensation uplifts.
3. Unpaid Sabbaticals and Career Breaks Offering unpaid leave or sabbaticals, particularly in quieter business periods, can provide a financial buffer while keeping talent close. 
4. Job Sharing and Reduced Hours These arrangements can help retain valued employees who may be looking for greater flexibility. They support work-life balance and reduce staffing costs.
5. Freeze Recruitment and Trim Contractors Before making redundancies, consider whether pausing new hires or reducing the use of contractors could achieve the same goal.

Engagement is Key 

Transparent, early engagement with staff can unearth valuable ideas and foster goodwill. With the Employment Rights Bill on the horizon, including potential restrictions on "fire and rehire", now is the time for thoughtful, strategic workforce planning.  Thinking of restructuring but want to preserve your team? Speak to our employment law experts for practical, people-first advice. If we can help, we will.