There are very few businesses that have not been faced with the prospect of having to make some of their staff redundant in the current economic downturn. However, many employers, with co-operation from their employees, are looking for alternatives to redundancies in order to save those jobs at risk.
Where this is the case you should look at some alternatives to laying off staff such as:
- Temporary pay cuts
You will have read a lot in the press recently of employers and employees agreeing to taking a temporary pay reductions. Whilst there is no typical or standard percentage a number of clients have agreed reductions from 5% to 15% across the board.
- Full Time to Part Time Status
There may be employees who are currently full time employees who would like to work part time. An employer can offer reduced working hours for anyone who is interested. While the reduction in hours is shared by all employees affected, the impact on one individual is obviously less severe than layoff.
- Shorter Workweeks
The idea here is that everyone works a shorter workweek to spread the work out.
- Voluntary Sabbaticals
Another option companies are offering is for employees to take unpaid or reduced salary leaves of absence.
Some companies offer a six-month to one-year voluntary sabbaticals to their employees to go off and do whatever they wish. They may pay a small percentage of the salary or provide the same benefits and let the employee keep his or her work phone number, laptop and e-mail. When the sabbatical is finished, the employee is entitled to return to their old jobs. This might be an option for employers who have a number of employees from overseas who might want to return home for a period of time. And it is a way to cut costs without losing the valuable people the company spent so much time recruiting and training.
- Voluntary redundancy
An employer might consider offering an enhanced package to employees to take voluntarily redundancy.
- Redeploying staff instead of replacing staff that leave
Where an employee retires or is promoted or leaves the employment the employer might choose not to replace any of these people with a new employee. The employer should look at redeploy people or combining jobs, etc. to absorb the extra work.
- Job Sharing
Another option that employers offer is job sharing, where several employees fill one job, each working part time.
- Employee Becomes Contractor
In this case, the employee ceases being a full time employee but is re-engageded as a contractor after a period of time on a contract arrangement. The employer would not be liable for PRSI or other benefits that the person was entitled to as an employee.
- Transferring/Retraining Employees
Moving workers from jobs to be downsized to other positions can mitigate the need for layoffs as well as tap the experience and expertise of the existing workforce.
- Offering Early Retirement
Another alternative is to offer employees incentives for early retirement.
Whilst I am not suggesting that an employer must consider all of the above options they should look and consider all other reasonable options before making an employee redundant.
What about staff who are on Maternity leave or out sick or on holidays?
Remember where there are any proposals that impact on staff an employer should ensure that ALL employees are fully informed as to what is going on and being considered.
In summary in the current economic climate some businesses may have to consider making one or more staff redundant. Whether the employer is bound by the obligation to consult or not it would be advisable to consider other options and discuss or offer them to your employees before moving to the final step of redundancy.
The HR department, Ireland.
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