With everything that has been going on in the world over the last few years, finances have been stretched for both people and businesses alike. This has led to many companies undergoing considerable changes, largely resulting in downsizing and, unfortunately, redundancies.
Many of us have been there at least once in our lives and it can be an incredibly emotional time, especially if you have dependents and outgoings that may be affected. However, this can also be a stressful time for companies and the people making these decisions; naturally we view the employee as the most affected, but it is important to note that redundancy can be an incredibly difficult call to make, with the potential for feelings of guilt - and the consequent stress - to bear.
In this article, we will be sharing some of our top tips for both people and businesses to help make navigating the redundancy ‘storm’ as easy and stress-free as it can be.
Employee-specific tips for getting through redundancy:
Make sure you are fully informed
- Do not sign anything until you have received professional advice. Lump sum payments on a redundancy can qualify for special tax treatment - they may be exempt from tax or may qualify for some relief from tax. It is imperative to get advice before you unknowingly sign anything with clauses that may not be in your best interests long-term.
- Make sure you understand the reasons behind the redundancy and how many people will be affected. This can sometimes help you to not take it personally and work on acceptance.
- Have honest conversations with your employer, as there may be ways that they can support you and make the redundancy process smoother. For example, employers can pay the cost of retraining an employee as part of a redundancy package, up to a maximum of €5,000, which will be exempt from tax once certain conditions are met.
Plan your next move
- View this as your second chance; an opportunity to redefine your career and life goals. People can end up in jobs they dislike instead of having the time to pursue their passions, like you do. Use this as an opportunity to take a breath, step back and reassess, without constantly running on the hamster wheel.
- Make a list of what you need to do before you leave the company:
- Update your CV while you’re there, to look back on and remind yourself of what you’ve been working on.
- Set up a LinkedIn or social media profile to request endorsements or recommendations from colleagues and clients.
- Gather information on your pension.
- Save off any personal information that you need; payslips, pension details etc.
- Finding a job in the current market may take some time, so it’s a good idea to understand your finances early on so that you know what you’re working with. This is the perfect time to work with a financial advisor - form a budget and check which benefits you may be entitled to whilst you are seeking employment.
- When you lose your job, you should register as unemployed with your local Intreo centre or Social Welfare Branch Office even if you do not qualify for an unemployment payment. You may be able to sign on for credited PRSI contributions so that you do not have a break in your social insurance record.
- You may be entitled to a tax refund if you have been out of work for some time.
- You will no longer receive a P45 when you lose your job. Your employer will notify Revenue of your leaving date and details of your final pay and deductions through Revenue’s online system. You can view these details through Revenue’s myAccount.
Social welfare and other supports
- If you have enough social insurance contributions, you may be entitled to jobseeker’s benefit - however there may be a period of disqualification if you are under 55 and receive a redundancy payment of more than €50,000.
- If you do not have enough PRSI contributions, you may qualify for jobseeker’s allowance which is a means-tested benefit.
- Depending on your circumstances you may qualify for a medical card or GP visit card, as well as other secondary benefits such as rent supplement under the Supplementary Welfare Allowance scheme.
- When you are returning to work, you should make sure that your tax and PRSI deductions are correct. You should let your local Intreo Centre or Social Welfare branch office know when you are starting work.
- If you are transitioning to self-employment, you may be eligible for the Back to Work enterprise allowance.
Be kind to yourself
- It’s important to look after yourself in your current situation. Treat yourself as you would a friend that was going through the same thing - be kind, understanding and supportive.
- Know that the breadth of emotions you are going through is normal.
- Remember, it’s not you as a person being made redundant, it’s your role in that business. You have value, skills and capabilities that another company would be lucky to gain.
- When your employment does end, still maintain the same positive habits that come with a job. Keep a strict routine and set yourself targets to hit.
- Set time to focus on your job search, but don’t let it consume you. Add exercise, a healthy diet and good quality sleep into your schedule. Looking after your physical and mental health throughout this period is just as important as finding a new role.
- Spend quality time doing things that make you happy, be that alone or with loved ones. If nothing springs to mind, use this time to try new things and find new passions.
- Do everything to consciously build your confidence back up; power stances, positive self-affirmations and talking to friends, family or a counsellor if it helps.
Tips for employers navigating a restructure and redundancy:
Similar to above, make sure you’re informed and organised
- Take your time to understand the intricacies of your employees’ roles and their actual day-to-day tasks. This can often help you to understand whether there might be an alternative to redundancy, which we all want to avoid if at all possible.
- Managing the redundancy process on top of all of your daily responsibilities can be a lot to handle, and it’s all too easy to begin cutting corners in an effort to try and speed things up. In the long run, it’s better to spend those extra few hours now ensuring everything is done and documented correctly.
- Get professional advice:
- Be aware of and secure legal advice on your planned process and your obligations.
- Engage guidance on any redundancy payments.
- Facilitate independent, comprehensive financial advice for employees if possible. Allow enough time for this before they must make any decisions in relation to things like redundancy payments or pensions, for example.
Choose the correct approach
- Delivering the news will be difficult, but you know your people deserve honesty. Be respectful, calm and to-the-point with your approach and communicate in a timely fashion.
- Those made redundant will understandably be upset and reactions to this news can vary. Be empathetic and try not to take anything hurtful said to heart - these types of responses will most likely be directed at the unfortunate situation, not you as a person or company.
- This is a time of high emotion, give the affected employee(s) some personal days and have an ‘open door’ approach for any questions or worries they may have.
- Make sure your existing employees are also supported. The stress of not only losing a colleague, but also the potential new worry about their own job security, may naturally raise some questions or concerns. Be on-hand to answer them as readily as possible to ensure morale and productivity doesn’t suffer.
At NFP, we believe in people and are happy to offer a financial review to anyone going through a redundancy. Likewise, we are also able to support companies that are faced with a restructuring project.
To find out how NFP can help you, or to enquire about a review, please email email@example.com and one of the team will be in touch.
Sinead Cullen Private Client Manager, NFP Ireland
If you would like to discuss how we can help you and your employees, get in touch with Sinead Cullen at: firstname.lastname@example.org or call our wealth management team on
+353 (1) 210 0210