Managing redundancy: What employees want
Redundancy isn’t easy, and the way it’s handled can leave a lasting impression on employees.

It can be hard to know how best to manage the process, especially for businesses that don’t have redundancies that often.

While there are legal requirements that need to be followed, beyond that there is plenty of scope for employers to handle the process well, so employees are happier with the outcome.

Here’s what employees want during the redundancy process and tips to help you make it a smoother, less stressful process for everyone.

What employees think about redundancy

First, let’s look at how employees feel after being made redundant. And that includes lots of us; research for SEEK shows that just over a third of all New Zealand candidates have been made redundant at some point in their working lives.

Two out of three said that redundancy was a scary time for them, and over half (55%) didn’t receive any support from their employer.

And just over a quarter – or 27% – didn’t receive any redundancy payment. While employers must follow a fair process, if an employment agreement doesn't mention redundancy pay then an employee isn't legally entitled to it.

“Redundancy can come as a huge shock,” says Adam Shapley, Managing Director of recruiting experts Hays in New Zealand.

“A lot of the candidates who come to us after a redundancy experience a loss of confidence.

“While there’s certainly no stigma in the jobs market around a redundancy, people can still feel unsure about how to frame a redundancy on their resume or talk about it in an interview.”

Teresa Moore, Managing Director Adecco New Zealand says the feedback the organisation normally hears from candidates about how their employers handle redundancy is around the efficiency of the process.

“It is a challenge but for many, speeding up the process, even though legislation requires a consultative approach, is key.”

A poorly handled redundancy process can have a real and lasting impact on people, and on the business too, says James Mcilvena, Managing Director of global talent development and transition company Lee Hecht Harrison South APAC (part of the Adecco Group).

It can even cause damage to an organisation’s brand or reputation, including through social media Mcilvena says.

Redundancy is upsetting for those who remain, too

Redundancies can be unnerving and upsetting for staff who stay with the organisation, too, especially if there are several at the same time. So it’s worth thinking about how redundancy will impact the staff that remain in terms of morale, job security and performance. 

“Employees at all levels – not just those directly impacted – will need support,” Mcilvena says.

“Those remaining are often key to the overall success of the changes and the future stability and growth of the organisation.”

Employees want communication and practical help

The research shows that of those employees who have been made redundant, these were the top five things they wish they’d received:

  • An additional payment on top of the legally required amount (41%)
  • An internal job offer (38%)
  • Counselling and health support services (30%)
  • Free career advice session with a career consultant (25%)
  • Links to an external job opportunity (21%)

Most of those can be condensed into one category: guidance, Mcilvena says.

“As employees are made redundant and deal with uncertainty, tailored career guidance is of most value.”

Employees may underestimate how difficult it is to find a new role quickly, which is very different to job hunting while they’re employed, he says.

“Leaders should prioritise planning, clear communication and coaching to help support their people.”

How to support employees through redundancy

  • Provide practical support 
    Help employees prepare for the job application process by providing advice and support with updating their resumes, applying for jobs and preparing for an interview, Shapley says. That’s especially true for long-term staff who haven’t had to search for a job in several years.

    One way to do this is by connecting them with a recruitment expert or career coach who can provide support and advice.

    “A redundancy can also impact a person’s mental health and wellbeing too, so providing the offer of one or more sessions with a counsellor, for instance, can be a great help,” he says.
  • Communicate regularly 
    Regularly check in with employees to see how they’re going, says Moore. “Those involved in a redundancy process have often said they felt like an outsider at the start of the process, and wanted more communication even if there was no update.”

    Make sure that all offers for support are mentioned verbally, and included in meeting minutes and written correspondence, she says.

    “Sometimes individuals miss key elements of support offered to them, due to the shock of hearing their role is being considered for redundancy, so repetition is helpful.”

Remember, redundancy comes with an emotional cost for the staff who are leaving as well as those who stay.

Clear communication with all staff and practical support will make a positive difference to their feelings about the company. Ultimately, looking after your employees throughout the process will benefit them and the stability and reputation of your business.

Source: Independent research conducted by Nature of behalf of SEEK, interviewing 4000 Kiwis annually. Published July 2021.