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18 Alternatives To Making Staff Redundant

Trevor Johnson highlights 18 proven alternatives to making staff redundant 18 Alternatives To Making Staff Redundant

Everyone hates getting rid of staff. But when there’s less work coming in and drastic cuts are inevitable, making redundancies often seems the only viable option.

The good news is it doesn’t have to be. Latest government figures show 50 per cent of small to medium-sized enterprises are freezing recruitment in the hope of avoiding redundancies, one in seven have introduced short-term working and 19 per cent are bringing in flexible hours.

Nearly 17 per cent of small firms are trying to save jobs by cutting bonuses and seven per cent are temporarily reducing wages in an attempt to hang on to valuable staff.

John Wright, a London business analyst and author, says: “Apparently, economies like these have actually resulted in staff in many companies keeping their jobs, when at first it seemed as though they would lose them.

“Some economies will clearly result in some pain, but that is usually preferable to actually losing your job. Once a company takes an in-depth look at its financial structure and work practices, it’s surprising what savings can be made.”

How can you reduce the chances of having to make redundancies in the coming months? Here are some proven alternatives to having to swing the scythe:

Reduce working hours

Obviously not a popular tactic, but infinitely preferable to redundancy. Even scaling back from 40 hours a week to 35 can often go a long way to keeping the workforce intact without bankrupting the company.

Offer flexible working

A popular system is requiring people to work peak times, but letting them choose their remaining working hours and giving them at least some sense of control, even though they are working less

Offer unpaid holidays

A growing method of cutting overheads. Studies have shown that a surprising number of workers, particularly older people who no longer have expensive children and mortgages, welcome the chance to have time off to do the garden or jobs around the house.

Encourage working from home

One of the most painless ways of cutting costs without cutting jobs is telecommuting. It can reduce the cost of keeping someone working in an office by at least 20 per cent.

Change working patterns

Compensate overtime with time off in lieu rather than cash. Employees rarely have a contractual right to overtime, but there’s always the danger that those who rely on it may leave.

Cut down those expensive night shifts. Experts warn that changing shift patterns can be tricky and requires careful consultation with workers who will be losing out.

Restrict/reduce recruitment

Scrap current vacancies and redistribute work among existing staff. Any vacant position could be ring fenced and offered to those at risk of redundancy.

Suggest redeployment/ retraining

The law provides that where employees are provided with suitable alternative employment, they are entitled to a trial four weeks in the new post, which can be extended to up to three months if everyone agrees.

Change working practices

And reduce the salary bill. For instance:

Voluntary reduced working time reduces working hours for an agreed time before a return to full-time work.

Voluntary part-time working.

Reducing or discontinuing overtime until things improve.

Suggest voluntary redundancy

If workers do apply for voluntary redundancy, will it leave the company short of the right mix of experience and skills, even though it may mean it won’t be necessary to make compulsory redundancies?

Remember, it’s the employer’s decision whether to grant an application for voluntary redundancy.

Job sharing

Latest figures show job sharing can produce surprising results - nearly 70 per cent of workers sharing a job can generate up to 30 per cent more output than if just one person did the work.

Improve teamwork

This can boost staff productivity. This can increase your competitiveness in these ways:

  • Encouraging innovation.
  • Taking advantage of advances in technology.
  • Employee motivation.

Team spirit doesn’t always come naturally, but it can be taught, according to Dr Mark de Rond of Cambridge University’s business school.

Offer leave of absence

On up to 20 per cent of salary to gain further qualifications or to do volunteer work.

It’s a way of cutting costs during hard times without losing the valuable people the company has spent so much time recruiting and training.

Make temporary pay cuts

Staff won’t like it, but if it’s a question of redundancy or less pay for a while, they should see the sense of it.

Hire the best staff

And pay them well. This may seem odd when we’re talking about cutting overheads, but there’s sound business logic behind it. A Manchester Business School study has shown that two top members of staff will be more productive - and cost effective - than three average personnel.

Outsource uneconomic work

Bringing in outside specialists to do non-productive but essential jobs makes good economic sense, however small your business, according to financial consultant EY.

It states: “Specialists can often do some jobs better than the staff of a small company and outsourcing is a cost effective way of hiring them. Anything that is outside the core competence of a small business is worth considering.”

Talk over problems

With your staff if redundancy looms. Says Mike English of management consultant Quantum Consultancy: “One thing that’s lacking in a lot of organisations is a meeting with the boss, where workers are allowed to air their views openly without repercussions and put forward their ideas. This should be done at least once every three months.”

Don’t be panicked

Bristol Business School researchers warn against slashing staff costs as the only way to cope with an economic slowdown. Instead, try the tactic of offering better service and higher quality products.

Finally, review everything regularly

All the best planning will be in vain if management doesn’t keep an eye open for problems.

Remember, in everything you pay for there are possible savings. With a bit of luck and good management, you might be able to trim unnecessary overheads without getting rid of anyone. Read more like this

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