26. Managing redundancies with empathy.

How to handle the hardest call an owner makes, in a way that protects your people and your business.

Picture the decision you have been putting off because there is no good version of it. The work has dried up, or the costs no longer add up. Either way the numbers are telling you what you already know. You are going to have to let people go, good people, people who have done nothing wrong, people whose mortgages and families you know by name. There is no clever way around it. The only real choice you have is how you do it. That choice will be remembered by the people who leave. It will be remembered just as keenly by the people who stay.

Redundancy is the heaviest thing most owners ever have to do. Small-business owners feel it hardest of all. You are not a faceless head office making a spreadsheet decision about strangers. You hired these people. You know their stories. That closeness makes it agonising. It also makes it matter even more that you handle it with care, because in a small team there is no hiding from how it was done.

Do it badly, in a rush, coldly or unfairly and the cost goes well beyond the people who leave. The team that remains watches every move. If they see colleagues treated as disposable, the trust you spent years building is gone in an afternoon, taking with it the discretionary effort that makes a small business work. Get it wrong legally and you add cost and grief to a situation that already has plenty of both.

You cannot make a redundancy painless. You can make it honest, fair and humane, which is what protects both the people affected and the business they leave behind. Here is how.

People will forgive you for the decision long before they forgive you for how you made it.

Be sure it is genuinely necessary

Redundancy is about the role, not the person. It also has to be real. Before you go near it, make sure you have looked hard at the alternatives, reduced hours, redeployment or cutting your own drawings first. If there is a genuine way to avoid it, take it. If there is not, you can at least face the people involved knowing you did everything you could before it came to this.

Get the process right

This is the one part of the article where the law is not optional. Redundancy in New Zealand has to follow a fair process, genuine consultation, real consideration of feedback and proper notice. Get advice before you start rather than after it goes wrong. Doing it properly is not red tape. It is what protects your people from being blindsided and protects you from a grievance on top of everything else.

Tell them yourself, face to face

Whatever it costs you, deliver the news in person, privately, plainly and with respect. No hiding behind an email, no getting someone else to do it. Be honest about why it is happening and clear that it is the role, not their worth. It is one of the hardest conversations you will ever have. Doing it yourself is the last and most important act of respect you can offer someone who gave you their work.

Help them land somewhere

The decision is made, but your duty of care is not finished. Do what you reasonably can to soften the landing, a fair package, a genuine reference, an introduction to someone who is hiring or time off to attend interviews. It costs little and it says everything about the kind of business you run. People remember who helped them when they were down. So does everyone watching.

Look after the ones who stay

In the rush of the hard conversations it is easy to forget the survivors. They are carrying plenty, guilt, fear, more work and a quiet question about whether they are next. Talk to them honestly. Explain where the business is going and why you believe it will come right. Acknowledge the loss rather than pretending it did not happen. The team that stays will judge you on how you treated the team that left.

What would you do?

Picture having to make a quarter of a small, close team redundant after a major contract falls through. The temptation, because it is so painful, is to do it fast and clinically and get it over with. Resist that. Take advice and run a proper, fair process. Tell each person yourself, with honesty and care. Do what you can to help them find the next thing. Then sit down with the people who remain, level with them about where things stand and recommit to the future. It will be one of the worst weeks of your working life. Handled this way, it is also the week your remaining team learns exactly what kind of person they work for.

“How you treat people on the way out is remembered far longer than why they left.”

There is no version of redundancy that does not hurt. There is a version that lets people leave with their dignity intact and lets the rest of the team keep their faith in you. There is also a version that does neither. The difference is not the decision, which the numbers may have made for you. It is the care, the honesty and the respect you bring to carrying it out. Do the hard thing as well as a hard thing can be done and you protect both the people you must let go and the business they leave in your hands.

Next in the series, how to let an employee down gently when you cannot give them what they were hoping for.