Why you should read this
Managing, planning and making redundancies will be one of the hardest things a founder will experience. Redundancies are an admin and paperwork-heavy exercise, with a considerable amount of legal, compliance and traditional HR advisory behind them. Despite their transactional core, redundancies must be led with heart and empathy. Developed in partnership with Ruth Cornish, founder of HR consultancy Amelore, this guide is intended to support founders/CEOs and leadership teams to think through the various elements of the redundancy process to build a respectful and empathetic process.
The official definition of redundancy is “when the employer ceases or intends to cease the business/role for which the employee was employed, or when the requirement for the employee to carry out work for a particular kind (or in a particular place) has ceased”.
Despite their transactional core, it is vital to remember that the redundancy process is emotionally charged and impactful at a people level; for employees who are exiting, those who remain in the business, and yourselves. Assume that your customers, suppliers, investors and key stakeholders will know how you managed the process. It indicates your ability to manage through a crisis and the strength of company policies and culture. Remembering that this change will impact you is vital also. The process should therefore be as thoughtful and dignified as possible, with considerable support, communication and clarity at every stage, with the duty of care (for both exiting and remaining employees) your north star.
This guide provides an overview of the key considerations to establish a respectful, empathetic process.
The Foundations
Exit Packages
Communication
Link the messaging to your values, culture and voice, rather than just using legal and HR- jargon-heavy language. Remember, this is not about getting ‘straight to the point’; you want to treat your leavers and remaining employees as key customers.
Take Cares
Redundancies are emotional processes impactful at a people level; for employees who are exiting, those who remain in the business, and yourselves. Here are a few best practices to manage the experience for all stakeholders involved.
What next
The saying that “people will forget what you said, but not how you made them feel” is highly applicable in the case of redundancy.
Your aim is for people to feel as though they have been cared for and treated fairly; prepare well, communicate with heart and keep people-wellness at the centre of your activity.
Amelore’s key takeaways:
- Do redundancies once. Having multiple rounds of redundancies affects culture and morale. Work with the finance team or a third-party financial advisor to ensure that you will be able to have enough runway to get through the other side of redundancies without having to repeat within the same year.
- Set up your redundancies plan first. Don’t decide who you want to make redundant before undertaking this process. It is vital not to mix poor performance with redundancy.
- Make your process clear and transparent. Have a clearly identified ‘consultation period’, and be transparent about your redundancy role selection criteria.
- Where possible, be generous with financial, well-being and benefits packages.
- Each country's legal jurisdiction will vary and have different requirements from a process perspective.
Contributors
This know how was developed with Ruth Cornish, founder of Amelore, taking inspiration and insights from ACAS, A16z, Reverb People and Founders Forum's ‘Managing Change’ Guide.
Ruth Cornish, founder of Amelore, is a passionate advocate for the HR profession and uses her independent status to share her HR vision, advising and challenging her fellow HR colleagues across the industry. She was recognised by her peers as one of the most influential thinkers in HR in 2021 and 2022 by HR Magazine. Before founding Amelore, Ruth held several senior leadership roles for companies, including Mazars, ABN Amro, Charterhouse, Old Mutual GNI and The Environment Agency. Ruth provides leadership support, executive coaching and strategic challenge to various organisations.
Ruth set up Amelore, an independent HR consultancy, to help companies ensure their “People” foundations are robust enough to support growth. They provide expert services to companies as they scale before an exit, often before they hire a Talent lead in-house, or, to complement existing resources. They support a range of issues, including reward and termination, leadership and organisational development, online learning, support with hiring HR leads, and HR administration management.
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