How to Handle Redundancies the Right Way – A Practical Guide for Finance Firm Owners

📉 A recent survey by Reed of 254 businesses found that 46% are freezing hiring plans due to the increase in employer National Insurance contributions. In London, 24% said they’re already making redundancies.

Whether it’s rising costs, a downturn in business, restructuring, or relocation – making roles redundant is never an easy decision. The word alone can stir up anxiety for everyone involved.

But when it becomes unavoidable, how you handle it matters – not just to stay legally compliant, but to preserve morale and protect your reputation.

Here’s a step-by-step guide to managing redundancies fairly, legally and with compassion:

✅ 1. Be Clear on the Why

Redundancy is about the role, not the person. You must show a legitimate business reason – such as closure, restructuring, or relocation.

If it’s about performance or behaviour, that’s a different process altogether.

✅ 2. Follow a Fair Process

Stick to your redundancy policy and honour any agreements with employee reps or trade unions. Transparency and fairness are key – shortcuts could land you in hot water with unfair dismissal claims.

✅ 3. Plan Like a Pro

Before any announcements, create a robust plan that covers:

• Business reasons for redundancy
• Alternatives you’ve explored
• Roles affected
• A clear timeline
• Fair, measurable selection criteria
• Statutory vs contractual pay and notice
• Support for impacted employees
• Training for managers handling the process

Don’t forget the wellbeing of the team members who stay.

✅ 4. Consult Meaningfully

Consultation isn’t a tick-box exercise. It must be genuine, two-way, and take place before decisions are finalised.

Planning more than 20 redundancies? You’ll need to follow collective consultation rules too.

✅ 5. Apply Objective Criteria

If selection is involved, use criteria that are:

• Clear and measurable
• Non-discriminatory
• Based on skills, qualifications, and performance
• Never on gut feel or personality

Need Support?

Redundancies are complex, emotionally charged, and – let’s be honest – risky if mishandled.

As HR specialists working with finance firm owners, we help you navigate the process with confidence, compliance and compassion. Whether you need help planning, consulting or having the right conversations – we’ve got your back.

📞 Ready for a confidential chat? Get in touch