Retaining a culture of trust whilst making redundancies

In our research conducted in March 2023 of over 500 employers with 50 or more staff who said that they make decisions about redundancies, we found that:

  • Two-fifths (42%) of employers expect to make redundancies in 2023
  • 16% of respondents confess to not understanding the redundancy process, despite making decisions about it

Does this lack of understanding create some challenging optics in the face of the predicted redundancies, and could it be perceived negatively by a less mature workforce?

The tricky relationship between trust and making tough business decisions

Gearalt Fahy, partner and employment law expert at Womble Bond Dickinson, said: “On the surface, we know that business leaders - especially those in the c-suite of large organisations - don’t need to understand the nuts and bolts behind the redundancy process and that this is the responsibility of a wider team and, often, requiring external support. However, the climate that organisations are operating in needs to be considered. We’re amid a huge workforce upheaval and the pace of change and speed at which these decisions must be made is unprecedented and presents an evolving challenge.”

Businesses are not only contending with swift decision making, but a multi-generational workforce that has been exposed to a different working experience during COVID, with more flexibility, hybrid working and an employment safety net through the likes of the furlough scheme. This has created a set of challenging optics.

Gearalt adds: “The impact of these decisions reverberates across the organisation and can influence staff retention and recruitment.

“There’s a balancing act as businesses need to appeal to a workforce that might have different expectations of normal working life or how their employer should behave during tough times. A lot of Gen Z employees in particular will have the support that they received during the pandemic as their only or most recent point of reference. They might expect that during tough times, there’s always going to be a safety net. For younger generations communication is key, as they may not understand the process or have the built in trust that their employer is making tough decisions because it is absolutely essential for the survival of the business.”

What influence will the Gen Z workforce have?

Gen Z will account for 27% of the workforce by 2025. According to Edelman’s report The Power of Gen Z: Trust & the Future Consumer, Gen Z highly values safety and security, with 70% of them making it a top priority. The lasting impacts of the Global Recession and the 2020-21 Global Pandemic have ingrained a strong need for stability in all aspects of their lives. The research states that only 50% of Gen Z trust CEOs. Comparatively, they tend to trust experts such as doctors (77%), scientists (75%), and educators (74%).

Gen Z is ushering in an era of openness. They demand inclusivity, fairness, and equity, and are wary of mistreatment or inequality. A notable 60% of them believe most people are untrustworthy, valuing individual trust more than in organisations.

This cultivation of trust will be essential during tough times in business. Gearalt advises: “Trust must be earned, and the Gen Z workforce will expect employers to uphold the values that they declare. This makes managing redundancies well critical for future appeal to the next generation of employees, starting with an understanding of the process you’re undertaking. Achieving this means fostering open dialogues, thoroughly adhering to proper procedures, and maintaining transparent communication channels. You might not be able to offer everyone in your organisation stability, but you can treat them with respect and offer transparency. There’s a way of getting things done quickly, but also getting it right, and that’s something business leaders and HR professionals are going to face more of.”

To find out more about how Womble Bond Dickinson can support you, particularly in managing large-scale redundancies, visit WBD Navigate.