Compulsory Redundancies: How to increase productivity in a difficult economic climate
Compulsory Redundancies: How to increase productivity in a difficult economic climate

Compulsory Redundancies: How to increase productivity in a difficult economic climate

Compulsory redundancies are common in the current economic climate, however cutting headcount can lead to problems with motivating and incentivising remaining employees. So, what are the alternatives to compulsory redundancy, and is it possible to make redundancies whilst increasing productivity and not greatly increasing costs?

Alternatives to compulsory redundancy

  • Voluntary redundancies
  • Use of consultants and/or temporary workers
  • Encouraging flexible working such as reduced hours or job sharing
  • Unpaid sabbaticals
  • Allowing employees to buy additional holiday
  • Temporarily freezing bonuses/cash benefits/salary increases
  • Providing secondments

How to improve productivity and low cost incentive programmes

Where redundancies are inevitable, consider how low or no cost ideas can assist in motivation. For example, you could make employees feel more secure and valued by providing a clear career structure, offering career development opportunities in the form of on-the-job training to keep costs low, loyalty bonuses or long term incentive awards. Likewise, providing employees with a free breakfast before 9am will only cost a small amount but may increase productivity because employees are likely to arrive and start work earlier to take advantage of this added benefit.

It is worth considering third party providers, who often have special offers. For example, gyms often provide corporate rates. Whilst it doesn’t cost the company anything to participate, the employee receives a benefit and may be healthier in the long run.  Initiatives such as this can also help to reduce absenteeism.

In short, although compulsory redundancies may seem the obvious option, there are often other more creative options to consider. Not only can these options be effective, but in the long term, when coupled with some inexpensive morale boosters, they may even lead to higher levels of productivity.

Need Help?

Thinking about redundancies? But want to stay on the right side of the law and limit the impact on your team? Our qualified HR team are on hand and can advise you on the correct HR procedures to put in place. Get in touch now by calling +44 (0)20 3751 4422 or email This email address is being protected from spambots. You need JavaScript enabled to view it..

Introducing the Author

This blog has been written by Danielle Spiers from our partner legal firm Sheridans. Danielle acts for both employers and senior-executives, with particular expertise in visual arts, music, film and television and financial services. Danielle is particularly well-known for negotiating senior hires and departures, and has a plethora of experience in TUPE, post-termination restrictions and employment litigation. Get in contact with Danielle here.

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