Help for small firms

Handling small-scale redundancies - A step-by-step guide

Example: Selecting who will leave

Handling small-scale redundancies - Real-life situation: Selecting who will leave

You are the managing director of a small and growing technology company designing and selling software products. You have a technical team with four software developers, and a sales team of seven.

You expect increased revenue from growing sales of existing products will lead to future re-investment for long-term growth. However, there is currently only enough full-time work for one person in the technical team.

What do you do next?

Your designers are intrinsic to future growth and you do not want to lose their skills in a redundancy situation. Some were involved in selling and promoting the business when in its infancy.

You consider the current job roles within the business and decide to widen the pool to include both the technical and sales staff. You draw up a list of selection criteria that includes essential skills for both roles along with absence, attendance and disciplinary records, and give each a best score of five.

You call a group meeting with the staff, informing them in advance that it is to discuss the future of the business. You advise them that they are all at risk of redundancy and propose a restructure of the business to include both technical and sales functions within some roles. You go on to explain your proposed selection criteria, how you will score individuals against this, and invite them to contribute ideas before final criteria are agreed.

Next, you arrange one-to-one consultation meetings and discuss the proposals in more detail. Constructive feedback helps you draw up a final list of selection criteria which you then use to score each employee. Individual scores are disclosed at further consultation meetings only to whom they relate and everyone has the opportunity to discuss them and raise any other matters. You discuss and agree the incorporation of sales duties with technical staff.

You identify the three people who score lowest and continue with a fair redundancy procedure to bring about their dismissal. You continue to have regular contact with remaining staff over the coming months and address matters arising from the new structure, thanking staff for their continued commitment to the future of the business. Sales continue to increase in line with business objectives and future investment in new developments looks viable.

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