The UK economy has lost billions of pounds this year due to Covid-19. With a lack of income, businesses have had to restructure due to lack of work. Many employers have had no choice but to consider or even undergo redundancy exercises. This is a costly exercise however to mitigate redundancies, there are a number of alternative options businesses should consider first.
Lay off/short time working. If there is a lack of work but there is hope that work will increase in the coming months, the employer can ask employees to reduce their working days/hours or to not come in at all for a short period of time. It is important that the contract of employment allows the employer to do this but in the absence of this, the employer will need to consult.
Reducing working hours permanently
Many businesses have already forecasted the next 12 months workload, with less work coming in – redundancy is likely however management could consult with staff about permanently reducing their working hours to avoid being made redundant.
Extend Furlough until 31st October
Though there is an additional cost element where the employer will need to pay employees’ national insurance and pension contribution, including an additional 10% in September and 20% in October. If there is an indication work will pick up after October, it would be beneficial to keep (trained) staff on furlough then to reintroduce them back into the workplace in November. This process will also lower future recruitment agencies costs. In addition the government is offering employers ‘Job retention bonus’ of £1000 bonus for every worker who has been on furlough and are still employed with the company until 31st January 2021.
Recruitment freeze
As part of the restructure process, many businesses have already put this in place to avoid unnecessary costs to the business. Employers may also need to consider letting go of temporary staff too. Limit overtime or freeze this for the time being.
Secondment
In this pandemic, there are other businesses which are thriving and are over worked. Secondment is one solution to ‘loan’ your staff to an industry which could benefit from an extra set of hands. The employee also benefits as they would continue to receive a salary.
So as you can see, reviewing alternatives before redundancy can be beneficial.
Should you require further assistance on the matter please call our advice – line team on 01455852028.
