Magazine article Public Finance

How to Handle Redundancies

Magazine article Public Finance

How to Handle Redundancies

Article excerpt

Be it central or local government, the health service or the police, we are entering uncharted terrain. The next year is not going to be easy and, for many, job losses are inevitable. So it will be more important than ever to ensure that redundancies are handled well and senior managers work together as much as possible.

According to the Office for Budget Responsibility, 600,000 jobs are to be lost from the public sector. The Chartered Institute of Personnel and Development forecasts 725,000. And there has certainly been a steady stream of job cut announcements since the 2010 spending settlement. These include around 1,000 posts going in Greater Manchester Police and in health trusts such as Pennine Acute Hospitals and St George's Healthcare; 1,500 in Liverpool City Council and 11,000 in the armed forces.

One thing is sure - in light of the toughest spending package in a generation, it is incumbent on all those working in the public sector to strike a balance between living within squeezed budgets, protecting essential services, and managing job losses as smoothly as possible.

Redundancy programmes are a major change to any organisation. These management development pages have given useful guidance over previous months on leading in difficult times and motivating staff. But there are also some specific guidelines to follow to ensure that redundancies are handled successfully. The ten main ones are listed below.

1 GET A GRIP ON YOUR WORKFORCE DATA

Crazy though it may seem, only a minority of organisations can truly claim to have a single version of the truth on numbers. Often, for example, the list of budgeted posts sits on finance systems while the details of actual staff in post sit on human resource department systems - and never the two do meet Organisations need to translate reduced budgets into headcount numbers and understand the impact on various staff groups, as well as being on top of vacancy rates, attrition and skills mix. Getting a handle on data is the top priority.

2 ENSURE YOU HAVE GOOD PROJECT MANAGEMENT AND ACCOUNTABILITY

Every redundancy programme needs good project management One way is to set up a senior-level workforce governance board to oversee redundancies, vacancy management and restructuring. This typically consists of finance, human resources and operational leads. Project management is required as successful redundancy programmes have many interdependences that need to be co-ordinated across a number of functions.

3 MAKE SURE PAYROLLAND PENSION DATA ARE UP TO DATE

A major part of any redundancy programme is having accurate and timely estimates of what departing staff will be paid and the effects on their pension. Most public sector organisations are considering voluntary severance programmes, which lead to many more enquiries from staff than the number eventually made redundant Often, thousands of estimates are required. If handled badly this can cause reputation damage and upset to individuals. Are your payroll and pension data complete and accurate and is your pension service geared up to provide timely estimates?

4 COST AND BUDGET FOR ALL ASPECTS OF REDUNDANCY

There can be a tendency to just budget for the redundancy payment itself but there are other costs to consider. Will there be payment in lieu of notice? Is help and transition support to be provided to those leaving? Will the HR department need to train managers to restructure and select staff for new roles or for redundancy? The department might also need some additional project support as capacity can be stretched helping line managers, revising policies and processes, consulting with trade unions and running redeployment support for surplus staff. …

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