Navigating redundancy risks in the wake of Covid-19
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Business headlines have made for sorry reading over the past few weeks as large corporates, including high street giants, global manufacturers and tech businesses, have announced plans for job cuts in the wake of Covid-19.
For some, these restructurings may have been contemplated since earlier in the year in response to Brexit, but are now being accelerated. Some businesses leaders may be sitting tight, waiting to see how the pandemic progresses and holding back on decisions until Q3 results are known, or until there is greater clarity on anticipated further waves of the virus.
New dimensions for employment lawyers and HR
For employment lawyers and HR professionals who have navigated economic crises in recent history, there is likely to be an element of déjà vu and the dusting off of previous advice or redundancy processes. However, this crisis comes with a significant difference. While in the past, the damage may have been limited to specific sectors, there remained other, stronger performing sectors in which redundant employees could rebuild their careers. For example, after the global financial crisis of 2007 – 2009, we saw a flight of finance professionals to tech. This time, almost no sector of the economy will be left untouched, and so a career change will be challenging for many. There is also a significant risk that historically under-represented groups will be impacted disproportionately by its fallout.
To compound this, many of those who are at risk of redundancy now are experiencing challenging personal circumstances, whether that be isolation, the mental health challenges of lockdown, or fears for their own health or that of a vulnerable loved one. In planning now for restructuring, the pastoral side of the process has never been more important.
Tips to navigate the risks
If you are considering headcount reductions, in particular, across a global workforce, here are some tips to help you manage the risks effectively. While legal requirements will inevitably drive your compliance approach, a successful outcome will be just as much about looking after your people (whether redundant or not) and future-proofing your business, including through continued progress towards diversity targets.