As we all know by now, there is talk of a 2023 UK Recession. The bank of England has even warned that a recession could last well into 2024. So, how likely is the need for redundancies in Finance, and how can CFOs and Finance Leaders respond to redundancy likelihood as humanely as possible? Here are 6 methods for ethically managing redundancies in Finance during a recession.
Will Redundancies in Finance be needed in 2023?
Redundancies are always a fact of business leadership. But, according to CIPD’s Autumn 2022 Labour Market Outlook, only 16% of employers were planning to make redundancies in the three months leading up to December 2022. However, this figure is trending upwards. In the face of a potentially long UK recession, it is likely that this figure could continue to grow into 2023. It is for this reason that a lot of our candidates at JasperRose have recently been coming to us with concerns about redundancies when they have been looking for employment.
However, a lot of roles in the finance industry specifically do quite historically well in a recession. A WallStreetPrep article identifies “recession-proof” financial career paths as being within restructuring and distressed advisory, investment banks with strong restructuring practices, and consulting firms. A financial team is also logically quite an essential element in overcoming a period of financial uncertainty as financial advice will be necessary.
Ultimately, though, this won’t be the case across the board, and it will be up to you or your company to make the hard but necessary decisions about the future of your business. At JasperRose we are of course always willing to talk to you about any insights we have into the financial hiring market.
Here are seven ways to help to support your employees during less certain times, and to make any necessary redundancies easier and as humane as possible.
1. Good Communication
Communication is key when it comes to managing redundancies in your finance team. If there is a likelihood of redundancies in your team, it is recommended to be transparent with concerned employees about the situation. Make sure to provide clear information and reassurance about next steps if an employee were to be affected.
2. Demonstrate Compassion and Offer Clear Reasoning
Redundancies can be a difficult and emotional process for everyone involved. Make sure to treat all affected employees with respect and compassion throughout the process. Employees will need justification for their redundancy, and this ties in with providing clear communication from the start about the probability of redundancies and the process. This will allow employees more time to accept, process, and understand the shift.
3. Offer Support and Resources
A great aftercare step for your redundant employees is offering them resources to help them move forwards into their next role. This can be in the form of a redundancy pack with mental health support links and CV guidance, or via a reference letter. It is also ideal to check-in after a period if possible, to maintain positive relationships and ensure a successful transition for your redundant employee.
4. Redeployment (Internally)
If an employee is no longer justified with their role, consider other open roles or positions within your organisation where they may be better suited. Different departments have different budgets and skill requirements, so if your employee has multiple skillsets then they may be in a better position to benefit your team (and be financially justifiable) in a different role.
5. Outplacement Services
If your company isn’t in a position to keep an employee on, another company might be. At the moment, the financial talent that we are speaking to seem to be moving towards bigger and more stable employers in order to guarantee themselves higher job security moving forwards.
If you are a smaller company, offering links to bigger companies that might offer more protection to an ex-employee during hard times is likely to maintain your relationship much more than a simple dismissal. This will also reflect positively on your company reputation. The same goes for bigger companies, as using your network to protect ex-employees shows outstanding culture, which should reflect in your ex-employee reviews and satisfaction.
6. Use a Recruitment Agency
By referring your employee to a recruitment agency alongside a good reference, the agency will be able to provide them with job-hunting support. This may also save you more time than providing outplacement services. Niche Recruitment Agencies have many contacts and open roles within their specialist area, and if the candidate matches the requirements of their clients they may be able to facilitate their transition to a new role. There is even the potential to market-out the candidate directly to clients who are hiring if the candidate has the relevant experience.
If you are having to make redundancies in the finance industry this 2023, we would be happy to receive your redundant employee’s CVs to help them move to a new finance role.
Redundancies are never ideal, but amidst concerns about a 2023 recession, these things are unfortunately being considered amongst Finance professionals. However, by implementing some of the suggestions we have included above, ethically managing redundancies in Finance during the 2023 UK recession has the potential to take less of a toll on both companies and employees alike.