UK's first recession in 11 years - impact on workforce planning


Waking up to the sobering news this morning that the UK has officially entered recession due to the coronavirus (COVID-19) pandemic, employers' minds may naturally focus on what workforce planning action might be necessary in order to achieve commercial stability in the coming months.

Inevitably, thoughts may turn to restructures and the unattractive prospect of making compulsory redundancies. It is also important to be aware of other temporary or permanent changes employers can make in order to preserve headcount, whilst also achieving greater business efficiency and cost savings.

Alternatives to Compulsory Redundancies

Examples of alternatives to making compulsory redundancies include:

  • offering voluntary redundancies and/or early retirement
  • reducing staff working hours and/or pay
  • agreeing to flexible working or unpaid leave
  • limiting or stopping overtime
  • implementing a recruitment freeze, and
  • terminating temporary or contract worker contracts

Whilst the Coronavirus Job Retention Scheme (CJRS) remains in operation until the end of October 2020, there is also the possibility of furloughing staff, subject to the CJRS eligibility requirements being met.

What Do Employers Need to Consider?

What action is right for your organisation will depend on its specific circumstances. Due to the nature of the pandemic, some sectors of the UK economy have been affected to a greater or lesser extent, and this may continue to be the case for some time. Whatever your organisation's position, it is essential to engage with staff, focusing on what changes might be necessary, the business reasons for these, and to gage staff response to any workforce planning proposal that is put forward. 

Importance of Staff Consultation

Where changes are proposed to terms and conditions of employment, or indeed where redundancies are proposed, formal consultation will be necessary before any workforce planning action is confirmed. Depending on the size of your workforce, a consultation process could take up to 45 days where there are 100 or more affected staff, or 30 days where there are between 20-99 affected staff. There is no minimum consultation period where there are fewer than 20 affected staff, but it is always important to engage in meaningful consultation which should not be rushed.  Whatever the size of your organisation therefore, early strategic workforce planning is essential.  

For more information on how we can support you in strategic workforce planning, please contact Gareth Edwards in VWV's Employment Law team on 07899 915 692.