The R Word - Do you really need to make redundancies?

If your business has been affected by the coronavirus, you will no doubt be exploring all the options for cutting costs and increasing revenues – including reducing your payroll. But redundancies may not be the best or only way to save money or improve the productivity of your workforce.

The COVD-19 crisis has led business owners to look more closely at how they run their businesses than ever before. The financial shock of lockdown and adapting to doing business at a distance means that every route to making more or spending less must be explored. And, although people are so much more than numbers, this includes the costs associated with employing staff.

The RfM Transform HR team have worked with many clients over the last few months to identify weak spots and make changes that will reduce costs and improve practices, ensuring they can retain their best people and strengthen the business for the future.

Lead HR Consultant, Diane Johnson, gives some insights into the strategies that have been used and the positive outcomes for our clients.

Begin with the end in mind*

When working with clients who know they need to change their businesses structure to survive, I start by asking lots of questions. This is not to suggest that they don’t know what’s right for their business; more to ensure that they have fully considered all aspects of the situation.

One of the first things I often ask is: If you were to start your business from scratch – knowing what you know now – what would it look like?

Metaphorically lifting the barrier of ‘what we have now’ can really help a client to visualise and articulate a business structure that perfectly matches what they actually want and need. For example, one business owner responded to this question by visualising their on-the-road sales team transitioning to a sales call centre.

Having been forced to connect with clients online throughout lockdown, they were curious to work out just how much it costs for their sales team to travel up and down the UK. Cars, insurance, maintenance, hotel accommodation and subsistence costs all add up. They found that not only could the business knock out 50% of those expenses immediately, but the sales team would be able to fit in more calls because they were not spending hours travelling from place to place.

By no means a last thought, our client could see that such a change would also be immensely beneficial to the health and wellbeing of their sales team by reducing the amount of driving, the stress of being stuck in traffic and the impact on family life of being away from home.

I can’t do that – can I?

Some business owners and managers are constrained by the thought that they just can’t ask their staff to change the terms of their employment. For example, if they have agreed to work patterns in the past that no longer work for the business and its customers.

One particular client had gotten into a pickle by feeling that they were not able to say no when an employee asked to reduce their hours to look after children. After agreeing that one employee could work Monday to Thursday only, they then felt obliged to allow other staff who asked to do the same, so as not to treat them differently. Inevitably, this led to not enough people working on Fridays and poor customer service. As it’s hard to appoint an employee on a one-day-a-week contract, the business then took on an additional full-time employee just to ensure they had cover on Fridays!

The net result of this was far too many hours worked at the front of the working week. We helped our client to work out what hours they actually needed on each day of the week and then supported a consultation process with employees to move hours worked to match the business demand.

Cashflow quick fixes

If you have short-term cash pressures, you will no doubt be putting measures in place to improve the situation, e.g. offering discounts for early payment, conducting customer credit checks, improving your inventory, paying suppliers less. If you’re hopeful that business will improve in the long term and you want to retain your skilled and loyal workforce, there are a number of things you might wish to propose to your employees. We can help you discuss options such as taking sabbaticals or unpaid leave, taking a pay cut or short-time working, in a way that is safe and legal.

The right outcome for you and your business

If you believe you need to make redundancies and would like the opportunity to explore whether there are other alternatives, why not book a session with a Transform HR consultant? They can help you determine if, ultimately, this is the right solution for your employees and your business.

* Habit 2 of the Seven Habits of Highly Effective People

To arrange a consultation, please contact us online or call Diane Johnson on 07720 353450.

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