Before Covid-19 struck, employers around the world and in Mauritius were struggling to find the talent they needed to be successful. Notably across the global sector, the hospitality sector and within the IT industry the lack of skilled and experienced workers were being cited by CEOs as one of their biggest concerns. Simultaneously, numerous studies were launched targeting the millennial mindset to try and unlock the secrets to attracting, engaging and retaining this generation of workers given their prominence in the workforce of today.
As we take stock of the damage caused by the pandemic to our economy and to our recently buoyant job market, it is tempting to focus on the here and now and not to be too concerned with the skills shortage that we were once grappling with. After all the market will soon be flooded with the unemployed as companies retrench, restructure and regroup in an effort to stay afloat with the minimum crew they can afford to manage costs and keep their companies alive.
Whilst no one knows for certain when “full” recovery will happen (early indications suggest not until Q4 of 2022), what is certain is that those employers who’ve had no choice but to let some of their prized employees go as a result of the pandemic wouldn’t hesitate to take them back in a heartbeat once their businesses pick up again. These employers knowing only too well the value of an engaged and committed employee to the success of their organizations.
But what would entice such employees to go back, or to even join a company looking for the best talent on the market? It can take years for a company to build their employer brand, their reputation as a place where people queue up for a chance to work. Millennials, in particular, are especially selective when it comes to choosing who to work for, often opting to only join those companies whose values are aligned to their own. And yet, a catastrophic event like the pandemic can tear an employer’s brand down in a matter of weeks if not days depending on the manner in which these companies handle the complicated and potentially messy business of reducing their headcount. Redundancy or the reduction of a workforce can be one of the most distressing events an employee can experience, and it isn’t pleasant for employers either. It requires sensitive handling by the employer to ensure fair treatment of those they are letting go as well as managing the morale and productivity of those who will remain.
So how can companies minimize the psychological pain brought on by a redundancy situation and at the same time limit the potential damage to their own reputation? Apart from ensuring that all legal requirements are followed, there are some best practices that employers should follow if their employees are to feel that the redundancy process has not been unfair.
Tip 1 : Start by making a redundancy plan. This should include:
- A cost review to determine the headcount that your business can afford in order to remain a sustainable business
- Details of how you propose to achieve the reduction in headcount and the timescales involved
- Consideration of all the challenges and opportunities that you might be presented with
- Your available budget or anticipated costs
- Identification of your key stakeholders
- All the steps you will need to take to achieve your objective
- Details of all the communications you need to make – one of the most important elements of your plan will be to put together a communication strategy to ensure clear and effective communication to employees (and possibly the Press). Communication should include the business rationale for the reduction in workforce, the intended timing, process, numbers involved, mechanism for selection and redundancy payments or benefits being offered if any.
- Your future plans for managing those who will remain
Tip 2 : Consider all other options to redundancy
Redundancy should always be considered as a last resort and only after all other options have been exhausted. Alternatives to redundancy can include any combination of the following:
- Flexible or part-time working or other variations in working hours such as the temporary suspension of work for some categories or types of workers (this would require the agreement of your workers)
- Restriction of external recruitment
- Reduction or freezing of overtime
- Retraining of staff for other roles within the organisation
- Voluntary reduction in pay and other benefits
Tip 3 : Notification and negotiation with trade unions or representatives or collective/individual consultation
Other than to meet their legal obligations, when employers consult meaningfully with affected employees and / or their representatives, this can go a long way to mitigate the feelings of powerlessness and loss of control that often accompany a redundancy situation. It can also increase the morale of all those affected during this difficult time. The purpose of meaningful consultation is to try and find solutions and ways to avoid the loss of jobs where possible. Very often, employees themselves may suggest options which you may not have considered or thought possible, or make you aware of other relevant issues that you may not be conscious of. As an alternative to losing their job, they may be willing to take pay cuts, accept the temporary suspension of their contracts of employment, waive certain or all of their benefits or take on alternative work whilst the company works on rebuilding the organization.
There are specific ways to structure these discussions, which very often will take place more than once. It is a good idea to prepare a script so that you don’t miss anything out during these meetings. Your initial announcement should include general information about the reasons for the proposed redundancies (including the financial situation of the company), the steps proposed to avoid or minimize the negative effects on employees, the numbers and roles impacted, and the timescales involved. The key to remember at this stage is that you are considering the positions or roles that you need to make redundant and not the individual people that you are looking to let go. Finally, make sure that you listen to the suggestions proposed by employees and their representatives so that you can respond appropriately, even if you don’t accept their proposals.
Tip 4 : Selecting employees for redundancy
If you’re making an entire, specific group of employees redundant, then you have already identified a specific talent pool that is affected. If however, you are looking to reduce staff numbers across multiple departments or roles, then you will need to assess employees against objective selection criteria.
Each employee from within a specific category, role or department, will need to be scored and ranked against these criteria in order to identify those employees provisionally selected for redundancy. Examples of criteria that can be applied include:
- Knowledge, skills and qualifications
- Disciplinary record (if the disciplinary warning has not expired)
Remember that you do have discretion over which criteria you choose, the aim being to retain specific knowledge, skills and a balanced workforce. You must however only use selection criteria for which you have documentary evidence to support their application. Choosing and applying criteria that are based purely on opinion would otherwise be viewed as unfair. If you don’t have sufficient objective criteria to make your selection, an alternative is to hold interviews with each employee and to assess him or her against objective criteria for the job.
Tip 5 : Notification of dismissals
Depending on the size of your organisation, you may be required to give notice of your decision to reduce your workforce to the Redundancy Board ensuring you follow the timescales stipulated in law. In all cases, however, once you have the green light to proceed with the reductions, best practice would dictate that you meet with each employee affected to inform them that they have been selected for redundancy and to explain the selection process used. The individual will want to know what the next steps are likely to be, the practicalities of their termination including any compensation, notice pay, and what support or assistance the employer may be willing to offer. It is a good idea to have all the relevant information confirmed in a letter which can be given to the affected employee at the end of the meeting.
Do give the individual the time to digest all the information and to raise any objections if they wish. Be prepared for a difficult conversation and for the individual to display a range of emotions. No matter how prepared an employee might be to handle the news of their job loss, the reality of the situation rarely plays out as expected and it is important to be prepared for any eventuality. Demonstrating transparency, compassion and empathy and being available for a subsequent meeting if required, will help the individual to feel valued and to come to terms with the fact that the loss of their job was for business reasons beyond their control.
Tip 6 : Don’t forget the survivors
It is essential to plan for how the business will operate once redundant staff leave and to communicate the company’s future vision to those employees who will remain on board. Be sensitive to the fact that your surviving staff have emerged from a difficult period themselves and that they will have lost colleagues and friends in the process. Many may be suffering from “survivors guilt” and may have questions that need answering. Communicating openly with those remaining will be key in helping them to move forward. The more you involve your employees and seek and listen to their views and suggestions for future business progress, the more likely you are to rebuild enthusiasm and morale quickly.
Follow the above guidelines, and you will go a long way to ensuring that your redundancy process is not only fair but that you will be remembered by your past, present and future employees for all the right reasons.
By Geeta Dhami
Managing Director, Prospects