As increasing numbers of businesses are able to reopen following lockdown, and employers are required to begin contributing to the costs of any employees taking furlough leave from the start of August, employers may find themselves in a position of having to think about how to reduce costs.

There will be some cases where making redundancies will be a sad necessity.  However, even though redundancy is often the first thing that is thought of when looking to save staffing costs, it will often not be the most suitable solution.  Employees who have worked with you for over two years will be entitled to statutory redundancy pay (which can be calculated here), which is a short term cost, however, if demand later increases, the employer may have to recruit again.  Making redundancies now will also mean that employers will miss out on the £1,000 job retention bonus, payable to employers for any employee who returns from furlough leave and remains employed through November, December and January.

And so how can cost savings be achieved without making redundancies?  Here are some ideas:

• Invite all employees if they are considering applying for flexible working to do so.  People may have enjoyed spending time with their families during lockdown, and so may find the idea of working part-time very attractive.  Our recent blog sets out how to handle flexible working requests.
• A consultation process to reduce or alter working hours may “share the burden” and reduce the need for redundancies;
• It may also be appropriate to look at the tasks that employees fulfill and if some reallocation may be appropriate, for example, Covid-related safety measures may mean that a shop requires employees to manage customer numbers at the door, rather than attending to the changing rooms.

Employees themselves will often have ideas for cost savings, and so inviting suggestions can also be beneficial.  Being honest about the financial challenges the business is facing can be helpful, so that the team can appreciate that there is a need for change.

If redundancy is a necessity, however, it is often best to begin by inviting applications for voluntary redundancy, as this can lead to a shorter and simpler process, less resentment, and reduced legal risk.

In our blogs over the coming weeks we will be exploring these options and redundancy processes in greater depth, and so please keep checking back.  If you are an employer who is looking to deliver a saving in your staff costs, a member of the ViewHR team will be very happy to discuss the options with you.