Benchmark Newsletter - QUARTER 1 - FEBRUARY 2009

Downsizing and how to handle it!

The images of shell-shocked Lehman Brothers employees clutching boxes of belongings as they were asked to leave their London offices has brought home the reality of the current economic recession to many people. Adding to this concern is the recent estimate from The Chartered Institute of Personnel and Development that a further half a million UK jobs will be axed next year. On a slightly lighter, but equally worrying note, www.personneltoday.com recently reported that sales of takeaway food have rocketed as workers stay late in a bid to avoid the threat of redundancy. So, how can an organisation help its employees once the decision has been made to make a number of jobs and people redundant?

It is generally acknowledged that redundancy can be one of the most stressful life experiences. Those affected are likely to be ill equipped for venturing out into the job market and often feel confused, angry and afraid. Many companies also under-estimate the effect that the whole redundancy or downsizing process has on the ‘survivors’ i.e. the people who remain. By implementing redundancies, you will have inadvertently raised doubts about the security of their own positions.

The challenge for bosses is therefore to ensure that employees leaving the organisation are treated fairly and with dignity but also that the remaining staff remain motivated and committed to the company and their work in hand.

A good organisation should therefore try to provide support and assistance to ‘cushion the blow’ and help their people cope with the whole process. They also need to show redundancy in a positive light by communicating a new vision and highlighting future prospects. Organisations should come up with a ‘Survivor’ strategy to ensure that remaining staff;

· are not overloaded with work

· feel valued and do not feel the need to look for a job elsewhere

· understand the need for the staff cuts that have been made and believe that the situation has been managed fairly.

This can only be achieved through effective communications at all levels within the organisation. Many companies also offer coaching or counselling to help individuals deal with the situation and re-focus on their own job and career.

So how can organisations help the individuals selected for redundancy?

Often these individuals find themselves unintentionally alienated by ‘survivors’ who are uncertain as to how to react to someone facing redundancy. They can unwittingly be excluded from teams and meetings because they ‘will not be around in a few weeks time’. They also have to go home every evening and suffer a barrage of questions about their future, often when they cannot even bear to think about it. Companies therefore need to handle the situation carefully and should consider;

· Having a formal redundancy policy accessible to all employees

This should ensure that in the event of possible redundancy, employees know that their welfare is being considered and also what to expect. The whole process should run a lot smoother if the Trade Unions, staff representatives and employees all agree to this policy

· Ensuring that managers are able to manage the whole process in a clear, honest, objective and well informed manner and that each employee is treated with the right level of compassion and respect

· Providing the individual with at much information as possible to help them at this difficult time in their working lives.
Such information should include

· The financial aspects i.e. redundancy pay, notice pay

· The timescales involved in the process i.e. consultation period, time of to look at other jobs

· Investment and tax advice

· The importance of discussing the situation with the family

· Career and outplacement advice

It would be hoped that by adopting such an approach, both survivors and redundant employees will see the organisation as displaying the right amount of consideration and compassion to its people at what can be a very distressing time.

Keep a sense of perspective

Redundancy no longer carries the stigma that it once did. It certainly does not imply that ‘you are not up to the task’ and you will never get another job again.

Being made redundant can be the best or worse thing that can happen to you. Many have used the experience as a ‘catalyst’ and have emerged stronger and in a better position than before, having re-invented themselves and their career!

Martyn Potter is a Human Resources Consultant at PKF accountants and business advisers, who have local offices in Sheffield, Leeds and Manchester. Should you wish to discuss this article or any other aspects of ‘people management’ please contact him on 0776... or martyn.potter@uk.pkf.com.

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Redundancy....Did you know?

1. It is a criminal offence for an employer to fail to give written details of calculation of a redundancy payment to a redundant employee.

2. An employee may be able to claim the equivalent of statutory redundancy pay from the State if his employer fails to pay it.

3. If an employee is made redundant without being told why he was selected, it is likely that an Employment Tribunal would find the dismissal was unfair dismissal for that reason alone

4. It is a breach of the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 to select employees for redundancy by virtue of their status as part time workers, unless justifiable on objective grounds

5. If a woman’s job becomes redundant while she is on maternity leave she will be treated as automatically unfairly dismissed if the employer had a suitable available vacancy, but failed to offer it to her over other candidates.

6. Where a business is closing and 20 or more employees at one establishment are being made redundant the employer’s statutory obligation to consult extends to consulting about reasons for the closures. This was not necessary before February 2008.

7. If an employer provides enhanced redundancy pay (i.e. an amount greater than that calculated in accordance with the statutory formula) it is unlawful age discrimination to pay all those being made redundant an amount calculated solely by reference to length of service or to pay them a flat amount regardless of age unless this can be justified on objective grounds.

Please visit www.tayloremmet.co.uk for further company information

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An update from our clients!

· DIGITAL EXCHANGE - Are delighted to announce that not only have they been awarded a Microsoft Certified Partner Status, they have recently been awarded Swyx's 'Most Successful Newcomer Award'! Please visit www.thedigitalgroup.co.uk for further information

· MAGNETIC SOLUTIONS - Are pleased to announce the launch of their latest product, printable / flexible magnets! A cost-effective marketing solution, especially during the current climate and further details and information can be found at www.magnetic-soltutions-ltd.co.uk

· DATA MEDIA & RETAIL are commencing the New Year with a drive to help companies such as Orange, NSPCC & 02 to enhance their databases and generate new business. Specialists in Target Marketing, DMRI offer a range of cost-effective promotions and marketing concepts! You can check out their website for more info at www.dmri.co.uk

· SHEFFIELD UNITED FC - Saw the launch of the new Copthorne Hotel at Bramhall Lane in December last year. As joint-biggest hotel in Sheffield, the 4 star establishment boasts 100 seat restaurant, 158 bedrooms, banqueting & leisure facilities and is owned by prestigious hotel chain, Millenium Copthorne. For further information and reservations please email sheffield@milleniumhotels.co.uk

· GUIDE DOGS UK - Are keen to promote charity payroll within companies of 50 employees or more. Companies will need to be CAF registered and the scheme offers employees the chance to donate any amount from £2 upwards to the charitable organisation via payroll. For further info please visit www.guidedogs.org.uk

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Final thoughts from Benchmark Recruit Director, Louisa Harrison - Walker

Many companies will be concerned about how to reward and retain staff at a time when profit margins are being squeezed. When the time comes for pay reviews and you don't have the cash for an inflation-busting pay rise, might extra holiday days be an option instead?

Rather than simply linking extra leave with length of service, why not offer it instead of a pay rise? Studies over time have shown that extra time off can be a much more valued benefit than cash alone.

For example: If your payroll is £200,000 pa and you were to offer staff a 4% pay rise, this would cost you an additional £8,000 plus employers NI at 12.8% (£1024) totalling £9024 pa.

However, if employees were to accept 2 days leave instead of the cash, this would only cost you £87 per employee, per day taken (if on £20k pa). So if all take the extra two it would cost you £1740 which amounts to a saving of £7284!! It is worth considering the cost associated with loss of productivity, however. Ideally, you want to coincide extra time off with slack / quieter periods to keep losses to a minimum

Louisa xxx

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Up and Coming Events

· PRO SHEFFIELD YOUNG PROFESSIONALS LUNCH - Friday 13th February 2009 12.00pm - 1.30pm @ Sakushi Sushi Bar, £12 members / £17 non-members Click here for a website link

· SHEFFIELD CHAMBER OF COMMERCE - Networking After Hours 11th February & 18th March 2009, Full details TBC
Click here for a website link

· FIRST WEDNESDAY CLUB - First Wednesday of every month Held at The Wig & Pen (Campo Lane), cost is £15 inc drink & hot buffet For further information please email malcolm@platillos.co.uk

· CREATIVE SHEFFIELD HR FORUM - Tuesday17th February 2009 9.00am - 3.30pm @ The Source (Meadowhall) For further information please email anne.brennan@shef.gov.uk