What is Redundancy? | Meaning & Definition | Akrivia HCM

Redundancy is a concept in human resource management in which an employer may have more than one person who fulfills the same function or serves the same purpose. This may happen for financial reasons or otherwise, but it also gives employers the ability to have a backup should someone be absent for any reason.

What are the reasons for redundancy?

Redundancy is a situation where there are too many people doing one particular job or task, and as a result, many individuals have to lose their jobs. There are many reasons for redundancy. Some of the most common ones are:

-The requirement for that job has decreased or ceased due to financial, political, or cultural reasons. For example, some jobs may be no longer necessary because all the tasks required by that job have been successfully automated, thus reducing the number of staff needed to do them.
-A new vertical has been introduced, making the earlier job unnecessary. It happens when a business expands into new areas and therefore requires new personnel, who then take over from those who previously carried out the same duties.
-The workplace is shifting, or the entire business is shutting down. Redundancy can happen as part of a cost-cutting plan if a business decides to move its operations abroad to take the lead of cheaper labor costs; it can also happen if a company enters liquidation and sells off its assets.*
-A new management has taken over and revamped the entire structure, making the job longer essential. It happens when a new manager takes over from his predecessor and decides that certain positions will no longer be required for one reason or another

Should you quit, or should you be made redundant?

The main element in deciding whether you should quit or be made redundant from your job is the duration of your employment. The reason for this is that if you have been with a company for a more extended period, from an employee’s perspective, it becomes better to be made redundant than to quit. The compensation for being made redundant is based on salary history and the number of years you have spent with the organization.

How do you choose redundancies?

Choosing the right employee for redundancy is a process that involves both human and mechanical inputs. The human inputs are the HR person who will interview the candidate and decide based on their experience, skills, attendance records, and overall conduct. At the same time, the mechanical inputs are the organization’s policies, which will be discussed in this paper.

The employee is chosen from among the pool of all employees based on three factors:
1. Work experience
2. Position in hierarchy
3. Attendance-record, disciplinary-record, and performance over the years.

What is the notice period for redundancy?

Redundancy notice is the period between your last day at work and your last paycheck. This period is also familiar as the redundancy notice period. The notice period extends from country to country as well as organization to organization. It should be an amount of time that is enough to find a new job. The notice period also expands with the number of years you have been associated with the firm. For instance, if you have worked for less than two years, then it will be a two weeks’ notice period and so on.

Today, firms are still bound by law to provide their employees with redundancy notices and a fair pay-off package as per their employment agreements and regulations set by the government.

What are the steps in the redundancy process?

Redundancy is a process that can be difficult for all concerned. The redundancy process is made up of five key stages:

  • Preparation.
  • Selection.
  • Individual Consultation.
  • Notice of Redundancy and Appeals.
  • The Termination Process.

Can someone be made redundant if their job still exists?

If you have been made redundant, it is likely that your job still exists; it has just been made redundant along with you. It is something of a sticky point in law, but it’s generally agreed that it’s against the rules of most organizations to make you redundant only to offer your job to someone else in the future. It’s also considered bad form.

What are the kinds of redundancies?

Voluntary redundancy

The first and most common redundancy happens when a worker quits or retires. It is usually planned well in advance, with the worker giving notice and the company planning to replace them. It is also often accompanied by some severance payments.

Compulsory redundancy

The second kind of redundancy happens when a company decides it needs fewer workers than it has, perhaps because business is down or because technology has made them unnecessary. Such layoffs are often not planned far in advance, and there may be no severance pay.

Let’s Recruit, Reward, and Retain
Your Workforce Together!

Request a Demo
Request a demo image