Recession and economic downturns present challenges for both employers and employees. Below are key actions for people professionals to consider, with links to relevant CIPD (The Chartered Institute of Personnel and Development) resources to help you support your organisation, work with unions, limit redundancies, and look after your own wellbeing.
Workforce planning
Review the structure of work, teams and job designs to capture synergies. Focus particularly on improving the capability of your line management and customer service. Think long term – protect your training and development budget and, if redundancies are planned, remember that recruiting when the market picks up can be difficult, costly and impact on your reputation.
Keeping employees engaged and informed
Dedicate attention to the employee experience. Talk to your employees, even when there is little concrete news. Foster open and transparent dialogue, provide direction and manage expectations. Keep your people managers up-to-date – give them tangible support and tools to manage difficult conversations.
Consider non-financial incentives to keep people motivated, such as team-building days and employee awards.
Supporting employees’ wellbeing
Set out processes to deal with workplace stress and potential conflict at an early stage. Recognise the psychological burden of a recession and rising living costs. Establish or review workplace mental and financial support as well as occupational health provisions to minimise anxiety, especially if there are pay or benefits cuts. If pay is affected, focus on protecting those on the lowest salaries. For more information on supporting employees and their financial wellbeing, visit CIPD’s Cost-of-living crisis: How to help your employees.
Managing a reduction in your workforce
Exhaust all cost-saving options before job cuts. Cut back on recruitment and review use of temporary staff or outsourcing. Reduce or pause overtime working and ask staff to suggest productivity improvements. Retrain and redeploy staff where possible; consider sabbaticals, temporary lay-offs, short time working, or offering the option of working four days a week for 20% pay cut. Consider savings through organisational benefits, such as temporarily reducing employer pension contributions, amending the company car policy and so on.
Develop a strategy for redundancy now. It is sensible to have a policy and procedures in place, and have informed employees, before you need them. Develop a skills audit to identify the skills and roles your organisation needs and who has them – to help ensure vital skills aren’t lost during voluntary redundancy. Make sure you understand the law relating to redundancies and above all, manage your redundancies fairly and equitably.
Support employees facing redundancy. Your treatment of departing employees will affect the attitudes and loyalty of those who remain. Explore offering outplacement services and counselling to help them find new employment. Give time off to look for other work or arrange training. Explore possible help or financial support for training and advice through the UK government website and agencies such as Jobcentre Plus.
Support the remaining workforce. Review team structures to create a fresh start and rearrange workspaces to eliminate gaps where people used to work. Provide documentation, training and support to help employees manage new responsibilities. Use positive language and focus messages on the opportunities as well as the challenges ahead.
Working with unions and employee representatives
Consult with the appropriate trade union. If there isn’t one, set up a special employee forum or consultative body ahead of any cuts to inform and consult with your employees and their representatives. Provide your employee representatives with training, paid time-off and appropriate facilities to engage with those they’re representing.
Manage your own wellbeing
Don’t forget to look after yourself. Operating in difficult times, especially when it involves redundancies, will be stressful and draining for HR teams. CIPD’s wellbeing guide for people managers provides practical resources and principles to support anyone involved in managing people. And CIPD members have free access to our wellbeing helpline services.
More CIPD resources
- Workforce planning
Use their factsheet to explore the workforce planning process and its benefits. - Job design
Read their job design factsheet for insight on the purpose, role and evolution of job design. - Employee engagement
Navigate to factsheets, guides and more on the fundamentals of building an engaged workforce. - Flexible working processes
Use their factsheet to understand flexible working and its benefits. - Contracts of employment
Find out what a ‘contract of employment’ is and how to vary the contractual terms. - Terms and conditions of employment
Access guidance on the legal issues surrounding the terms of employment. - Information and Consultation of Employees (ICE): what, why and how
Understand ICE regulations and how to set up and manage effective information and consultation. - Compromise and partnership rather than legislation required to fix the UK’s employment relations problems
Read the CIPD blog post on industrial and employee relations and what they mean for people professionals. - Guide on managing the redundancy process
Read the CIPD guide for employers on managing the redundancy process. - How to limit ‘the sinking ship syndrome’ during redundancies
Read the article on ‘survivor syndrome’ experienced by those who are not made redundant. - Wellbeing
Use CIPD’s guides and other content to learn about the benefits of an effective wellbeing programme.
