If you can’t handle redundancies, you shouldn’t be boss

Straight-talking common sense from the front line of management

Q

Some years ago I had the unpleasant task of making some of my workforce redundant. Individual selection was left entirely to me and made on the basis of their worth to the company. Although I spoke to all the employees who were selected, to this day I still feel guilty that I should have been more philanthropic, when I knew that other jobs in the area were nonexistent. What do you think?

A

Carrying out a redundancy programme is probably the most traumatic experience of being a senior manager. Even the most professional HR executives, who take pride in saying goodbye to colleagues legally and sympathetically, find it impossible to ignore the immediate personal problems they have caused. Losing a job is often more than just bad news for an employee, the sense of loss extends to their household, especially if they are the main breadwinner. I will never forget the first time I had to tell someone they had lost their job. I still remember the mixture of guilt and grief when I announced the sale of our shoe shop chain to a meeting of all the colleagues at our main office and warehouse – most of whom were certain to be made redundant by the new owners. Whatever the circumstances, you can’t help feeling that you have let down the very people who trusted you to look after them.

It can happen in the best-run companies. We all make a few mistakes and we live in a changing world. Covid came as a complete surprise that threatened the future of our company, so we had to cut our wage bill to guarantee our survival. It was, as politicians say, “the right thing to do” – but that doesn’t make you feel better. Suddenly you cease to be everybody’s best friend and no longer sit on the moral high ground.

The dreaded day is preceded by sleepless nights spent turning the decision over in your mind. But be comforted by the fact that failing to face the obvious is a route to disaster. You can’t significantly cut costs without cutting wages and cannot be tempted to give a poor performing colleague the benefit of the doubt (even if you picked that person when they applied for the job).

The decision may be caused by events beyond your control, but you and your management team have a duty to run a process that cares for the feelings of those in the firing line.

Over the years, I’ve seen a few pretty impersonal redundancy announcements. This year, P&O Ferries informed their workforce via Zoom. A cold call that literally left colleagues high and dry.

Twenty years ago our major competitor communicated it by voice message. On the Friday afternoon all branch colleagues had one of two numbers to call. The first number gave relatively good news – although shops were being closed, their shop was safe. Colleagues ringing the other number were told they had lost their job.

You were fully in charge of your redundancy programme back then, but these days it is wise for HR to give a helping hand. However, don’t always let the lawyers have their own way. I will never forgive myself for approving a notice in 2004, which put all our finance team at risk of redundancy, including Karina and Gail, who had been our star performers for over 20 years. That letter was a lie, sent to protect us at a possible future tribunal. I’d rather be honest, ignore the guidelines and risk an industrial tribunal.

You talk about a philanthropic approach and certainly when making redundancies we should be generous. Not so much by going beyond the statutory settlement terms, but, particularly by helping colleagues to find another job. Give time off needed to attend interviews, help by responding quickly to any request for a reference and make a member of your HR team available as a mentor, giving career advice and interview techniques.

It is right to look after the colleagues who are leaving but do even more to care for those who are staying with the business – the company’s future depends on them. You are unlikely to be on your ex-colleagues’ Christmas card list, but the better you handle the redundancy programme the more respect you will receive from the survivors. They will know in an instant whether you have picked the right people to go and kept the key people to be part of the future. Smart colleagues recognise good management and a redundancy decision, however traumatic, can kick-start a positive future.

Being realistic, redundancies are an inevitable part of a long-term business. If you don’t want to be involved in making the toughest of tough decisions perhaps you’re not cut out to be a chief executive.