One in five employers planning redundancies this year, Acas warns

Businesses urged to be transparent and compassionate during layoff process and ‘exhaust all possible alternatives’ first

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Nearly one in five employers are likely to make staff redundancies this year, an Acas poll has found.

The survey of 1,074 senior business decision-makers, conducted by YouGov for the government’s arbitration service, found that 18 per cent were likely to reduce their headcount in the 12 months to March 2023.

In comparison, 72 per cent said they were unlikely to make redundancies, and one in 10 (10 per cent) said they did not know.

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Larger businesses were more likely to say they might make redundancies than SMEs; nearly a third (30 per cent) of businesses employing 250 or more people said redundancies were on the cards, compared to just 10 per cent of businesses with fewer than 250 employees.

Acas has urged employers that find themselves with no other options than to reduce their headcount to make sure they follow the strict rules on consulting with employees.

Susan Clews, chief executive of Acas, advised organisations to “exhaust all possible alternatives to redundancies first”.

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“But, if employers feel like they have no choice, then they must follow the law in this area or they could be subject to a costly legal process,” she said,

Kathryn Barnes, European employment counsel at Globalization Partners, added that employers should try to be transparent as possible throughout any redundancy processes.

“Employers should make certain they are open and honest about the position of the business throughout the entire redundancy process, breaking down any difficult barriers and ensuring employees feel as if they are valued and heard,” she said.

Barnes warned organisations that fail to handle redundancies with compassion were more likely to see employees contest their dismissal. “The more understanding an employer is, the easier the route will be through the process,” she said.