This article was written for and featured in Menswear Buyer, Womenswear Buyer and Childrenswear Buyer.
Whether you are a retailer, manufacturer, supplier or agent, the impact of the global recession is hard to escape. Faced with budget reductions and a squeezed bottom line, many businesses in the fashion sector and beyond have resorted to making redundancies. With the headlines taken up by retail giants such as Arcadia, it is easy to forget the countless smaller fashion businesses that have done the same in an attempt to stay afloat. Although the financial forecast is undoubtedly gloomy there are alternatives to consider before making compulsory redundancies, which should always be the last resort.
Before planning redundancies, every employer should ask itself whether it has exhausted all other options. For example, have voluntary redundancy or “early retirement” been considered? Compulsory redundancies damage morale and can be costly in terms of management time and liquidity if poorly executed. Most of the measures below are less draconian and are reversible, allowing fashion businesses to respond swiftly to the extra workload if business picks up.
Consider whether some of the alternatives below might work for your business:
Top tips:
1) Ask employees if they can come up with any innovative ways of reducing costs to help avoid redundancies. By involving them in the process, employees are likely to feel a greater sense of camaraderie and may therefore be more open to some of the above options.
2) If any fundamental changes are made to employees’ contracts of employment, their consent will be required.
3) If none of the options are viable, ensure that a fair selection process is used to decide who should be made redundant and a fair consultation process is followed before the final decision to dismiss is taken.
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