14 November 2024
A practical guide to restructuring and redundancy
In the fast-paced world of business, organisations large and small need to adapt to stay competitive. Whether it’s through restructuring or managing redundancies, these processes can be daunting but are sometimes necessary to meet evolving business needs. Understanding that change can be challenging, especially for close-knit teams, it is crucial to focus on fairness, transparency, and the welfare of employees.
Restructuring: Streamlining for Success
Restructuring isn’t just for large corporations; small businesses can benefit from it too. Whether adjusting leadership roles, reorganising departments, or streamlining business processes, and who does what, restructuring can help align resources with operational needs and strategic goals.
Why Restructure?
Restructuring is effective in improving efficiency, realigning costs, or enhancing customer service. The goal is to enable the organisation to be more agile and sustainable in the long term. This could involve simplifying processes, removing silos, or reallocating roles to better meet business objectives.
Handling Restructuring
A clear, structured approach can make the restructuring process smoother:
- Planning: Begin by developing a proposal that outlines the reasons for restructuring, the scope of the changes, and a timeline for implementation. It’s important to cover both why and how.
- Communication: Keeping the team informed, updated, and establishing two way communication is crucial. Ensure that all employees understand the reasons for the changes and how they will be affected.
- Consultation: Engage with employees to gather feedback and explore alternative solutions. This collaborative approach helps minimise disruption, maintain morale and present new ideas for improvement and enhancement.
- Support: Provide ongoing support to the team, helping them adjust to change, new concepts, taking on new skills or responsibilities, with a focus on retraining and redeployment whenever possible.
Avoiding Redundancies: Exploring Alternatives
While restructuring doesn’t always lead to job losses, redundancy can sometimes be an unavoidable part of the process. However, it’s vital (and a legal requirement) to explore alternatives to job loses wherever possible.
How to Avoid Redundancies
Every employee is valuable, so it’s essential to consider all possible alternatives before resorting to redundancy:
- Cutting Overtime: Reducing or eliminating overtime can be a simple way to cut costs without affecting the core team.
- Freezing Salaries: Temporary salary freezes or delays in pay rises can help balance the books while retaining the workforce.
- Redeployment and Retraining: Identify roles within the business that might be a better fit for employees whose positions are at risk.
- Flexible Working Arrangements: Job sharing, part-time work, or short time working can be effective ways to retain employees while reducing costs.
- Limiting New Hires: Pausing recruitment can help manage resources more effectively without affecting current staff.
Managing Redundancies: A Fair and Transparent Approach
When redundancy is unavoidable, it’s crucial to handle the process with care and sensitivity, especially in a small business where relationships are close.
Redundancy Process
Here’s how to manage the redundancy process effectively:
- Voluntary Redundancy: It can be helpful to start by inviting applications for voluntary redundancy, while recognising that some roles are critical to the business and may not be suitable for this option.
- Selection Criteria: If voluntary redundancy doesn’t achieve the structure or reduction required, apply clear, objective criteria to determine which roles are at risk of redundancy. This might include factors like experience, skills, and performance.
- Consultation: Employees at risk of redundancy must be given the opportunity to discuss their situation face to face, suggest alternatives, and explore redeployment options.
- Notice and Support: Ensure that employees who are selected for redundancy receive appropriate notice, redundancy pay (where applicable), reasonable time off to job seek, and if possible, support in finding new employment or training opportunities.
Protecting the Rights of New Parents
New regulations effective from 6th April 2024 provide additional protection for new parents facing redundancy. It’s important for businesses to comply with these rules, which ensure that new parents are not discriminated against, and if their job role is redundant following a fair process, that they are provided with the first opportunity to be considered for any vacant roles. This legislation encompasses extended protection for pregnant employees, those on maternity, adoption, or shared parental leave, and those that have recently returned from family leave.
Conclusion
For any organisation, managing change can be challenging, but with the right approach, it can also be an opportunity for growth. By navigating restructuring and redundancy with confidence, care, and a focus on the welfare of staff, workplaces can emerge stronger and more resilient.
The content of our blogs is intended for general information and not to replace legal or other professional advice.
