Business Studies – 2.2.4 Why reducing the size of the workforce may be necessary | e-Consult

Recommendation: The most justifiable redundancies would be among the 5 administrative staff and potentially some of the junior technicians. While the skilled production workers are crucial for production, and the senior managers are vital for strategic direction, the administrative and junior technician roles offer more potential for cost savings without severely impacting core operational capacity.

Justification:

• Cost Savings: Administrative staff and junior technicians typically have lower salaries compared to the other employee groups. Redundancy in these areas will directly contribute to the required 15% cost reduction.
• Impact on Core Operations: While losing administrative staff will require restructuring and potentially increased workload for remaining staff, the core manufacturing process can likely continue with the remaining skilled production workers and technicians. The senior managers' strategic role is harder to replace quickly.
• Legal Considerations: It's crucial to ensure any redundancy process adheres to UK employment law, including fair selection criteria (e.g., skills, performance, seniority) and consultation with employees. Focusing on roles with lower skill levels and easier replacement is often a safer approach legally.
• Alternatives Considered: Before resorting to redundancy, the company should explore alternatives such as pay cuts (across the board, potentially with senior managers taking a larger proportion of the cut), reduced working hours, or a temporary hiring freeze. However, if these are insufficient to meet the 15% cost reduction target, redundancy becomes a necessary, albeit difficult, option.

Important Note: This is a complex decision and should be made after careful consideration of all factors, including legal advice and the potential impact on employee morale.