With employee confidence at an all-time low and a sharp rise in redundancies on the horizon, where does this leave employers in managing and maintaining a workforce that feels worried, apprehensive and facing uncertainty?
A challenging outlook for employers
The latest CIPD Labour Market Outlook for Winter 2024/2025 takes a close look at the current job market and the tough decisions businesses are now having to make. For SMEs and the voluntary sector, the report highlights growing challenges, with an 8-point drop in the net employment balance since last quarter – showing a widening gap between businesses looking to expand their teams and those preparing for cutbacks.
For many employers, particularly in the private and third sectors, this signals a difficult period. Rising employment costs mean businesses are facing tough choices – whether to reduce staff or put hiring plans on hold.
For those opting to pause recruitment, now is a great time to focus on retaining your existing workforce.
Here are a few ways to do this:
- Investing in employee wellbeing – put in place regular check ins, offer flexible working, ensure employees are prioritising a work life balance.
- Upskilling existing talent – is there any training you can offer employees? Could you put in place mentorship programmes or offer the chance to shadow another employee?
- Provide more opportunities to employees – this should be through a promotion or even giving employees opportunities to work in other departments or on bigger projects, to help with exposure and learning new skills.
- Create a resilient workplace culture – this can help maintain morale and productivity through uncertain times.
Redundancies on the rise – this highest in over a decade
For many businesses, redundancies have become unavoidable with a quarter of employers preparing to make employee cutbacks in the last quarter (January to March 2025) marking it the highest level of planned redundancies in over a decade, excluding the pandemic period. The pressure is seen across all sectors, however a particular increase in the private sector, where redundancy intentions have risen by 5% and 6% in the voluntary sector. These figures show the financial strain many employers are facing as they balance reducing costs, staff morale and business stability.
Exploring all options before redundancies
It goes without saying, this period is difficult for all involved and the stress, uncertainty and worry can have a big impact on employees as well as a negative impact on workplace culture. Therefore, handling conversations sensitively, being transparent in challenges faced and following processes is critical to support employees and employers through these difficult decisions.
Before moving forward with redundancies, it’s important for employers to explore all possible alternatives to help maintain talent whilst easing financial pressures. These might include:
- Reducing working hours or moving to part-time models
- Introducing job-sharing opportunities
- Redeploying employees into other roles within the organisation.
Navigating the redundancy process
If redundancies are unavoidable, employers must guide their workforce through these emotional and uncertain times, balancing empathy with strategic decision-making and legal precision. This is where experienced HR teams and consultants become invaluable in helping to navigate:
- Evaluating all options – whether redundancies really are the only option or if offering reduced hours, job-sharing or redeployment can help to retain talent whilst still relieving financial stress.
- Acting in line with legal guidelines – ensuring redundancy processes are handled with care and according to legal requirements to minimise the risk of tribunals.
- Communicating effectively – being clear and transparent in all communications about the difficult decisions being made and the challenges the business faces – not only for those exiting the business but also for those who remain.
- Providing employment support – this is about wider support, offering services to equip employees with useful resources to help prepare employees transitioning to other workplaces.
- Building a sustainable business – surviving one round of redundancies is enough for all involved, therefore redeveloping a business model that provides long term stability can minimise the risk of future workforce reductions.
How can we help?
At CE People, we’re here to support organisations through tough decisions with our expertise. Whether that means exploring alternatives to redundancy, managing the process responsibly or planning for a more stable future.
If you’re navigating workforce changes and need expert HR guidance, reach out for a confidential conversation today: let’s chat!
