How to manage your workforce in a recession

 A joint Acas and CIPD guidance note

1. Think long term 

• Think creatively about how to reduce employment costs, such as new ways of working and work reorganisation.
  •  See CIPD Research Insight Smart Working: The impact of work organisation and job design
• Remember that making people redundant and recruiting again later when the market picks up is expensive. 
• Protect and make the most of the training budget – focus resources on key areas such as improving line management capability and customer service. 
• Bear in mind your long-term reputation and responsibility to act as a fair employer.
  
  
  

2.  Maintain employee engagement 

• Redouble your efforts to boost or maintain employee engagement.
  • See CIPD Research Insight Employee Engagement in Context
• Manage expectations and set a clear sense of direction.
• Keep employees in the picture even when there is little concrete news. 
  • See Acas guide Employee Communications and Consultation 
• Use all available media to beat the rumour mill.
• Think about creative, non-financial ways of motivating employees such as recognition schemes, team-building days and employee awards.
  
  
  

3.  Strengthen line management capability 

• Support your managers so they are better able to operate in periods of traumatic change.
• Brief line managers in full on developments so they can talk to their teams – face-to-face communications are best.
• Recognise the vital role that line managers play in every aspect of the employment relationship – make sure they are properly trained in day-to-day people management skills.
  • See CIPD guide Line Management Behaviour and Stress at Work 
• Line managers also need support and leadership from senior management and from HR to equip them to manage difficult situations and avoid burning out.
  
  
  

4. Support employees’ health and well-being 

• Recognise the psychological burden and impact that can arise in a recession – make sure workplace support and occupational health provision are in place to prevent high levels of work-related stress.
  • See Acas guide Health, Work and Wellbeing 
  • See CIPD Research Insight What’s Happening with Well-being at Work? 
• Where possible provide opportunities for flexible working to help employees balance their work and home lives.
  • See Acas guide Flexible Working and Work–life Balance    
• Ensure you have mechanisms in place to deal with workplace stress and potential conflict at an early stage.
  •  Acas guide Stress at Work 
  •  See CIPD/Acas guide Mediation: An employers’ guide
• Recognise the potential negative impact of ‘survivor syndrome’ if your organisation has made redundancies – employees that remain in organisations where there have been job cuts often suffer from guilt while coping with increased workloads.
  
  
  

5. Develop a strategy for redundancy so it’s there when you need it 

• You need to start thinking about how you will handle significant redundancies at least three months before you anticipate they might need to take effect.
• Ensure the HR team is equipped to deal with redundancy situations at both collective and individual levels.
• Understand the law relating to redundancies and review procedures.
• Establish a policy and procedures to be used if workforce reductions are unavoidable.
  • See  CIPD factsheet Redundancy
• Tell employees about the policy.
• Manage any redundancy situation in a fair and equitable manner.
   
  
  

6. Think about ways to minimise redundancies if workforce reductions are inevitable

• Take advantage of natural wastage and/or offer voluntary redundancy terms – redundancies can have a serious negative impact on morale and performance.
  • See Acas guide Redundancy Handling
• Cut back recruitment and review your use of temporary staff.
• Retrain employees whose skills are no longer in demand and redeploy employees to other parts of the organisation where possible.
• Reduce or eliminate overtime working.
• Consider short-time working, temporary lay-offs or sabbaticals.
  • See Acas leaflet Lay-offs and Short-time Working
• Plan reward strategies carefully – especially if the scope for pay awards is restricted.
  • See Acas guide Pay Systems 
• Encourage staff to suggest how jobs can be done more efficiently and costs saved. 
   

7.  Consult with your workforce and employee representatives

• Consult with your trade union if one is recognised. 
• If there is no trade union, set up a special employee forum or consultative body long enough before the redundancies occur to provide information and to consult. 
• Ensure that employee representatives have paid time off and appropriate facilities in order to meet and communicate with their constituents. 
• Provide training for representatives – legally this has to be done, but it will also help the smooth running of the whole process.
  • See Acas training website 
  • See CIPD training website
• Consult employee representatives about ways to avoid redundancies, reducing the number to be dismissed and mitigating the consequences of any redundancies. The consultation must take place with a view to reaching an agreement. 
• Recognise the difficult but key role that employee representatives have to play. Reassure them that they will not suffer as a result of carrying out their role. 
   

8. Establish fair and objective selection criteria that will help you to retain key people 

• In selecting people for redundancy, use objective criteria that can be applied in an unbiased way. This can include, for example, attendance records, disciplinary records, skills, experience or competence, work standards or aptitude to work. 
• Ensure that the selection criteria are based on accurate records and are not discriminatory, directly or indirectly. 
• Ensure that you are not losing vital skills in encouraging voluntary redundancy. 
   

9. Help redundant employees to find other work 

• Those who are facing redundancy need support and advice on how to cope – consider offering outplacement services and counselling to help redundant employees find new employment.
• Give time off to let affected employees look for other work or arrange training.
• Explore the possibilities of help or financial support for training and advice from government agencies such as Jobcentre Plus and Train to Gain.
• Remember your treatment of employees who leave the organisation will impact on the attitudes and loyalty of those who remain.
  • See Acas guide Managing Attendance and Employee Turnover 
    
    

10. Plan for the future 

• Reallocate jobs and responsibilities among the remaining workforce.
• Reorganise work spaces to eliminate gaps where people used to work: plan for a fresh start.
• Provide training for new jobs and new positions.
• Communicate and consult at all stages and pay particular attention to ensuring that line managers are fully involved in the change programme.
• Give positive messages focusing on the opportunities as well as the challenges ahead.