Reducing Redundancies
In my time in Business Analysis, I have witnessed a company making several good people redundant, whilst at exactly the same time, paying to recruit people with similar (but not exactly the same) skills.
More often I see a time lag between the redundancy and the recruitment - or at a later date the hiring of temps and contractors to do the work that now is not getting done.
The economic cost of doing this damages the company - in both direct costs (redundancy costs, agency fees, training and the inevitable learning curve) and indirect costs (such as opportunities missed). The human cost is much greater - whether or not had a direct influence on their role being the one to be axed.
If we can prevent one needless redundancy, the world would be a better place. What causes an organisation to be hiring and firing at similar times?
1: We don't need people here, we need them there
Despite legislation that pushes for an internal search for an alternative role, the redundancy process puts both disgruntled employee and prospective manager off. Both sides can find this a bit of a disadvantage.
2: We don't need people with your skills right now
But the odds are that the organisation will do in the future.
There have been a few wild and wacky ideas that have been floated - some have been implemented:
Contents
1: Unpaid Sabbaticals
If you have good people, but cannot find a use for them right now, but will need their skills in the future, offering an unpaid sabbatical could be a win- win. Admittedly, the circumstances of the employee and company have to be aligned, but it's a useful one to have in the tool bag. If the employee returns and the market circumstances have not changed, then you might have to pay a little extra redundancy.
2: Flexible Unpaid Leave
Redundancy is a (severe) way of reducing the salary bill. Giving employees the ability to book unpaid leave (days or hours) with their managers allows a flexible way of working. One consequence of this is to reduce the salary bill, but not necessarily in a predictable way. It does, however, change the culture towards flexibility which encourages employees to perceive their job differently.
3: Enabling Sideways Movement
Secondment is almost a dirty word in HR. It is awkward and difficult and presents challenges for the main HR processes (such as appraisal, salary review and salary allocation). Giving secondment a good name might be tricky, but many graduate schemes of yesteryear mandated secondment style movement to acquaint the grad with the whole business. Perhaps it should be reinvented for a new generation?
4: An Internal Temp Agency
You want to reduce the number of staff in a particular area but there are individuals that you would prefer not to lose. With their permission, using them as temps whilst seeing if another permanent position becomes available could again be a win win, if the employee would like to continue working for the company despite the tough times. This has to be seen by both sides as a temporary solution, perhaps with a hard end date, but the extra time could allow company and employee enough time to find the solution.
5: An External Temp Agency
This is one of my daft ideas that could just work. The problem with the internal temp agency is that it does not reduce the overall salary bill. However, once again with full employee knowledge and consent, redundancy could be avoided or delayed by the company acting as a temp agency to other companies. This could be potentially facilitated by temp agencies already in the field, the company supplying the employees to the agency. Again, a hard end date would need to be set to prevent the situation continuing indefinitely and putting the employee's career on hold.
These are my first thoughts on methods to solve the redundancy problem, I hope they have inspired your thinking. I welcome hearing your ideas or development of these, please feel free to chat on:
Twitter: @PeopleSoftUser
Further Resources
HR Law - includes a nice option to ask the employees!