81% of large enterprises predict redundancies: Insights from ‘Shift happens’ research
Redundancy is not just a business decision – it’s a deeply personal experience that impacts both individuals and teams. Our ‘Shift happens’ research reveals that 81% of large enterprises who took part anticipate workforce reductions in 2025 – highlighting the critical need for thoughtful transition strategies to maintain trust and morale and avoid lasting reputational damage.
In this blog, we’ll explore the key findings from our research and share practical guidance for HR and leadership teams managing the complexities of redundancies.
Understanding redundancy management in 2025
Why redundancies are increasing in UK organisations
Workforce reductions are becoming a growing concern for UK businesses, driven by factors such as economic uncertainty, rising employer NI contributions, the increasing minimum wage and the impact of AI. Additionally, the risk of costly employment tribunals and a surge in new laws add complexity to decision-making.
As organisations navigate these challenges, managing redundancies effectively is crucial to maintain employee morale and safeguard the company’s reputation.
When redundancy is the only viable option, it should be carried out with fairness, transparency and compassion, ensuring that all affected parties are treated with respect.
The hidden costs of poorly managed redundancies
Mishandled redundancies can lead to emotional strain, reduced productivity and reputational damage, affecting both departing and remaining employees. Poorly executed processes harm morale, breed distrust and increase turnover.
In the case of mass redundancies, which are becoming more prevalent in the news, clear communication, compassion and legal compliance are essential. People teams should provide emotional support and career transition services, while leadership must set an empathetic tone.
However, research shows a disconnect between leadership and HR, which complicates the process and increases emotional and reputational risks.
Aligning priorities: C-suite vs. HR
Our ‘Shift happens’ research reveals a gap between C-suite executives and HR professionals on redundancy processes. While 54% of C-suite executives worry about legal compliance, only 36% of HR professionals share this concern.
Interestingly, 63% of executives view large-scale redundancies as “very complex,” compared to just 15% of HR professionals. Another key difference in opinion is the role technology can play in easing common challenges during large-scale change. While 80% of C-suite executives believe technology has a significant impact, only 39% of HR professionals share this view. In fact, 17% of HR professionals don’t see any value in using technology for the purpose.
Bridging this gap is crucial for a smoother, more cohesive redundancy process.
Balancing the emotional and legal challenges of redundancies
From 20th January 2025, redundancy processes will become more complex with stricter rules on consultation, communication and support. Currently, tribunals can award up to 90 days’ gross pay (uncapped) for each employee who has the right to lawful collective consultation. From January, this amount can be increased by 25% for failing to meet collective consultation obligations during redundancies.
The Employment Rights Bill is also set to strengthen collective consultation requirements by removing the “at one establishment” condition, which determines when consultation is necessary. To stay compliant, it’s essential to track redundancy proposals across your entire organisation and identify when collective consultation is triggered. Check out our group company Halborn’s recent update on what this means in practice.
Failure to meet legal standards could result in legal, financial and trust issues. HR and leadership teams must collaborate to mitigate these risks.
*The Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment of Schedule A2) Order 2024 is the legislation introducing the change.
A people-first approach to redundancy
One area that both the C-suite and HR do agree on is that a smooth transition for impacted employees is a top priority, yet many organisations fail to provide adequate support. Surprisingly, only 2 out of 5 businesses who took part in our research invest in outplacement services, which are crucial for a compassionate transition for impacted employees.
Mental health support, career transition services and clear communication help employees move on confidently. Supporting managers and their teams with training and well-being initiatives is essential for navigating change and maintaining support for remaining employees.
By prioritising these approaches, organisations can ensure a more resilient and positive outcome for everyone involved.
The role of technology in redundancy processes
How an organisation handles redundancies can have a lasting impact. By leveraging technology, companies can make redundancy consultations more efficient, consistent and compassionate.
Meeting Manager by AdviserPlus simplifies large-scale change and consultation processes by reducing admin burdens, allowing HR teams to focus on employee support while managers have the right conversations with their direct reports.
Key features include efficient meeting scheduling, secure document storage, online booking features, manager scripts, real-time updates and management information. We also offer optional expert notetakers, reducing the admin burden on your inhouse teams and ensuring consistent meetings and legal compliance.
This unique, designed-for-purpose tool boosts confidence of those managing consultation meetings, streamlines communication, and ensures a smooth, efficient change management process.
The time for organisations to prepare for change is now
To develop a compassionate change management process, including redundancies, organisations should:
- Audit current change management processes including redundancies;
- Stay updated on employment laws to avoid legal risks;
- Balance financial sustainability with team culture;
- Implement tech solutions to improve transitions;
- Provide compassionate support for affected employees;
- Align HR and C-suite priorities.
Successful organisations see transitions as opportunities to realign and invest in their people.
Alternative cost-saving options to boost the bottom line
When redundancies are unavoidable, managing change efficiently is crucial. It’s equally important to consider other ways of achieving long-term savings and ROI, which may help reduce the need for large-scale headcount reductions. Investing in purpose-built employee relations technology can deliver significant savings over time.
empower®, our market-leading employee relations case management system, simplifies handling issues like sickness absence, performance management and disciplinaries. By automating alerts and automatically storing case documentation, it eliminates reliance on spreadsheets and manual systems, ensuring consistency, reducing errors and maintaining legal compliance.
Key benefits of empower®:
- Boosting manager confidence and capability: Boosting manager confidence and capability through guided journeys and prompts helps them handle employee relations issues quickly and effectively. This strengthens their ability to manage tough situations, improve relationships, address problems early and reduce HR involvement, leading to better business outcomes.
- Saving costs and improving efficiency: Equipping managers to confidently handle everyday employee relations scenarios allows HR to focus on complex cases, leading to direct savings by reducing ER case advice costs and tribunal risks. Indirect savings, such as higher productivity, fewer sick days and shorter cases, enhance efficiency, giving HR more time to focus on other priorities.
- Preparing for legal changes and mitigating risk: Guiding managers through key processes, like probation periods, helps organisations stay ahead of legal changes, such as new employee rights from day one. This proactive approach minimises legal risks and tribunals, ensuring better compliance and protecting the organisation.
With empower®, you can achieve up to a 50% reduction in employment tribunal claims, up to a 10% reduction in sickness absence costs, and significant gains in productivity and efficiency. Over 90% of employee relations tasks become manager-led, streamlining operations and empowering your team. Read our case studies here.
Investing in empower® goes beyond just saving costs in the long run – it prepares your organisation for the future. It ensures proper processes are followed when issues arise and builds long-term resilience and stronger relationships between employees and managers.
How Empowering People Group can help
At the Empowering People Group, we combine legal expertise, technology, career support and digital learning to help organisations handle large-scale change like redundancies in a compliant and compassionate way.
Our group companies – Halborns offer straightforward legal clarity, AdviserPlus provide consultation support and tech-led solutions to simplify change management processes, Working Transitions offer career coaching and outplacement support, and Learning Nexus provide engaging digital learning solutions to build people capabilities.
We empower organisations to handle redundancy processes in a way that is both compliant and compassionate.
Want to assess how people-centric your redundancy process truly is?
Book a no-obligation consultation with one of our experts. With the right approach, redundancy doesn’t have to be a traumatic experience – it can lead to new opportunities and stronger trust in your organisation.