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How to Balance Making Redundancies with Investing in People

As a Chair and CEO, I have hired and fired employees in the past – I can confirm that I absolutely loathe making people redundant. I work independently via my coaching business CertaintyOne, as well as an associate of Work Horizons. It is vitally important for companies to do what they need in order to survive the pandemic, which means cutting costs where needed. But after the pandemic is over, can we really expect employees to fully re-engage and perform well when working from home without expert coaching? This requires a fresh approach and a major change in attitude…



In the current climate, the temptation for many is to cut costs and treat employees as a commodity is extremely strong. Directors who need to complete pandemic-driven cost cutting exercises, such as furloughing, redundancy, future outplacements, and general overhead reductions never find this easy.


But how do Directors actually make these decisions?


It is vitally important to maintain the long-term loyalty of any remaining employees, whilst still protecting or enhancing the business’ success and reputation. Leaders need to remember that staff members may still be reeling from the loss of their fellow employees and need some extra motivation and support during these difficult times.

Are employees really seen as worthy investments?

If a business or charity is facing extreme pressure, employees should be carefully considered as a ‘protected’ asset. It is traditionally expected that Directors turn to their Financial Directors for help, whose focus is always on the numbers. Together, they typically set targets for the following areas:

  • Chasing revenue

  • Maintaining profit

  • Making returns for investors

  • Handling and retaining key customers

  • Reducing stock and manufacturing costs

  • Fine-tuning dependence on supply and distribution channels

  • Cutting the numbers and costs of employees


But employees should not just be recognised as a ‘wage cost’ on a balance sheet – they possess key skills, experience, and a commitment to your operation as a whole.

The effects of COVID-19 and the approaching Fourth Industrial Revolution

Today’s economy is rapidly changing due to the impact of covid-19 and the fast-approaching Fourth Industrial Revolution; and so, Directors may need to think even more carefully about their staff. Leaders should aim to achieve the optimal combination of the remaining human workforce, alongside the upcoming use of AI and RPA (Robot Process Automation) – this will ensure a positive and balanced impact on the future of the work itself.


The Fourth Industrial Revolution comes with its own set of concerns and an inevitable resistance to change. Team composition and staff profiles will need to alter dramatically – Finance and HR departments will not necessarily need to rely on fewer people as a result of smart technologies, but they will need to nurture different skill sets and approaches to work.



The impact on a Director’s reputation if they fail to value staff

Local communities, customers and suppliers will notice if any Chief Executive, Managing Director, HR or Financial Director is responsible for any of the following:

  • Hurriedly reducing costs by cutting long-serving loyal staff, whilst not appearing to consider their real value.

  • Harshly reducing or minimising redundancy compensation amounts.

  • Being unaware of any outgoing employees’ struggles i.e., unemployment and financial issues.

  • Assuming that any remaining employees will continue to work effectively and not harbour any grudges about how their past work colleagues have been treated.


Directors of modern companies need to work much closer with their HR Directors. HR Directors are best positioned to assess, profile and coach employees; helping them to develop and grow. Together, these key decision-makers should invest in some expert leadership coaching for their staff so they can adapt to new ways of working – whether full-time, part-time or from home. Staff are then more likely to succeed at their role through excellent job performance.


Even in these difficult times, companies MUST allocate funds to invest in people and reshape their roles to suit this current changing world.



How to make redundancies with compassion and care

First and foremost, all Directors must treat everyone fairly – especially is they are making, or have made, redundancies. They must support outgoing employees with fair redundancy payments, which will help them to survive and feed their families, whilst buying them time to recover, retrain and find new jobs.


If a business does not possess these skills in-house, they can enlist the short-term support of a specialist external service provider. Those made redundant will need to be resilient in an economy where new jobs are scarce or may not exist at all in certain sectors. Asking for external help may prove invaluable.



Every life matters

Communities, customers, distributors, suppliers, and other businesses will notice and remember how business owners and Directors behaved when they needed to cut jobs. But they will also remember those organisations who helped people the most during these hard times. This includes investing by coaching.


We all play our part in today’s society. Every life matters, and every good deed made towards redundant individuals and remaining employees’ careers helps to develop a good and caring society of which we can all be proud to be part.


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