Could Your Company Offer Voluntary Redundancies?

In all likelihood the average office employee will already have some experience of redundancy. They might have been made redundant from a previous job, or may have witnessed a collective office redundancy, and lost colleagues and friends in the process.

In the current climate, cuts are common and it has become increasingly hard to optimise about the subject of redundancy without sounding extremely patronising.

Saying things like “don’t worry, it’s the job that’s redundant, not you”, or “this could be a new beginning”, whilst very true are probably not enough to lift the spirits of even the most optimistic staff after losing the jobs they’ve given so much to.

Furthermore, for those who are unfortunate enough to have been made redundant several times, they may well have reason to be sceptical about words of wisdom coming from anyone, not least their employer.

A different approach

The relatively recent introduction of Voluntary Redundancy schemes then, has brought about a new approach to redundancies, in theory allowing a great deal of the stigma and animosity associated with redundancy to be sidestepped.

Needless to say, by the time the need to downsize a workforce has been realised, spirits will be low in all ranks of the company but the most controversial and hard-hitting area in these circumstances is the selection and notification process itself.

Clumsily handled redundancies will aggrieve employees and the use of Voluntary Redundancy schemes encourages cooperation from both parties and the possibility of avoiding disagreements is a large benefit.

Some of the arguments in favour of Voluntray Redundancies:

It is less demoralising for the company

There are not many things that drain morale and enthusiasm in the workplace in the same way that turning up to a half empty office after all your friends and colleagues have been made redundant will.

By offering a Voluntary Redundancy scheme the idea is that you can offer a package to those who are not as enthusiastic or dedicated to the job, or maybe fancy a change in their career, whilst still rewarding them for all the hard work that they have contributed to the company.

To utter an overused phrase, "there is now winner when it comes to redundancy."

This is true, but it is certainly easier to take for all parties when someone hasn’t been forced out against their will.

They can be less disruptive.

No one wants an office full of workers who fear for their careers. The sense that your employer is busy conspiring behind the scenes, drawing up lists of who is going and who’s staying makes for a very tense environment.

As an employer, once you have established a pool from which the voluntary redundancies will may come, they can be kept informed of developments. Provided that sufficient people volunteer (and those you can manage without), you should be able to keep company performance disruption to a minimum.

More points to consider...

This brings me to another a few points worth considering:

Of course a major consideration and dissuader for many employers is that Voluntary Redundancies can be more costly.

A compromise may need to be made in spending more to introduce successful redundancies and waiting longer term to see the financial benefits.

It can also be a factor that by offering Voluntary Redundancies you can end up with more willing to go than you had expected, which can result in those who are not selected feeling disheartened.

Likewise, Voluntary Redundancy tends to attract the highest earners or the most skilled employees (those entitled to the most compensation). As an employer you must be wary of causing a skills imbalance by losing important members of staff.

That said, if carried out sensibly a reshuffle of the higher ranks can be beneficial on all fronts. If there are eager successors waiting in the wings it can be refreshing for a company and cost effective in the long term and so may be preferable to certain companies.

The best option?

As with any overhaul in the workplace, Voluntary Redundancy schemes have their fair share of pros and cons.

It is much a matter of what is right for your company and with apt foresight a company should be able to manage redundancies gradually and voluntarily and avoid bringing in mass cuts.

Whilst not perfect for every situation, the increasing amount of redundancies nationwide means that Voluntary Redundancies at least deserve consideration.