The evolution of Redundancy: a business mandate

By Claire Jones

November 26, 2020

HR News, Posted on Nov 26, 2020

According to the BBC, British employers planned 58,000 redundancies in August, taking the total to 498,000 for the first five months of the pandemic. That’s nearly half a million Brits now out of work, scrabbling for new opportunities in a very difficult job market. Don’t just take my word for it, according to the latest jobs market report from employment website CV-Library, the number of job vacancies in the UK fell by 62.7% in the second quarter of 2020 – and for those jobs that are being advertised, the average application-to-job ratio has risen to 84%.

Making lay-offs is one of the most difficult tasks of the HR division. However, doing it at a time when talent has nowhere to go is even worse. No wonder it’s starting to take its toll. A recent report by LHH found that 93% of HR decision are feeling under more pressure than ever before, and quarter (25%) believe they were not handling redundancies and layoffs as well as they have done previously. There is also an, often forgotten, impact to the businesses in this new connected world. If handled badly lay-offs and redundancies can lead to negative reviews and a bad employee brand which has serious impacts when recovery comes.  A study by Randstad USA showed 57% of job candidates avoid companies with negative online reviews. And customers are also paying attention with many defecting after a company conducts layoffs.

Unprecedented times require new thinking. It’s not good enough to follow old processes that simply don’t mesh with the new world of work. There is an alternative – HR teams can rethink their redundancy process and offer new startup outskilling and reskilling pathways. Whereas jobs may be falling, startups are thriving, which makes the solution obvious – create a pathway that helps exiting talent learn the skills to start their own business.

A 2019 report from Direct Line uncovered that more than a third of workers who have been made redundant used the experience as an opportunity to start working for themselves. The process is tried and tested. Nokia was faced with making over 40,000 job cuts. As well as open centres across Europe to help employees being exited with career advice, it also formed ‘Bridge,’ an entrepreneurial stream for employees that had an idea for a startup.

Helping your employees building a startup in a downturn may feel counterintuitive but data and history shows that in times of rapid disruption there are ample opportunities for new startups to take advantage, in fact IBM, HP, FedEx and Microsoft were started during recessions. Consumers needs and behaviours radically change when there’s a shift in the economy, which open up market opportunities that didn’t previously exist.

So how can HR leaders create these new pathways? They need to align ‘talent’ that enables departing employees from different disciplines such as engineering, marketing and sales to come together and share ideas as well as offering a range of support from seed funding to providing access to unused IP, assets or data to not just build the skills but the opportunity to kickstart their success.

To capitalise on the positive impact and use this to actually grow brand equity, there needs to be a planned and sustained comms campaign inside and outside the organisation and to find the right partner to deliver the best experience for your people to maximise success.

As with any downturn there will be a new generation of high growth startups. Unlike, before there is a window for businesses to decide what role they want to play.  Do they want to demonstrate their brand and live by their ‘people first’ values and take a proactive role in reshaping the future?  Do they want to be seen as the company that took action to innovatively help the talent they are being forced to exit, whilst also helping stimulate the economy to enable Britain to return to growth faster?

Those companies who use this crisis to live their values and empower their people to create the future is something that won’t resonate with those departing but can play a critical role in talent attraction and retention for the future.


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