As with the natural cycle of all things, businesses are born and when the time comes, they die.
Safestyle UK, is the latest large company to enter administration in the UK.
After trading for almost 31 years, the company collapsed last Friday due to factors including poor consumer confidence. Interpath’s Advisory’s managing director Rick Harrison said “After seeing strong sales during the Covid lockdown periods, many companies are seeing trading being impacted by the cost-of-living crisis and soaring costs.”
Whilst around 70 of the company’s 750 workers are being kept on in the short term to complete closing down duties, more than 600 employees have found themselves without a job.
What Can Businesses Do To Avoid Redundancies?
When faced with financial problems, there are a number of steps to take before resorting to sudden redundancies.
To save on office space and utilities costs, consider allowing employees to work flexible hours or fully remote. Continue to foster a team atmosphere through in-person and virtual team building activities, and frequent good communication practices.
To boost operational efficiency, and reduce the need for new hires, you could train existing employees to perform multiple tasks. Make sure your requests are reasonable or it won’t end up being an efficient solution.
Feedback And Appraisals
Identifying areas for improvement and promoting a culture of learning can be easily done by regularly assessing employee performance, and giving them constructive feedback.
Search for and consider using government programs, loans or grants that exist to support small businesses through financial difficulties.
Raise Finance Privately
Applying for loans, grants, lines of credit or starting a crowdfunding campaign could successfully reduce the need for redundancies.
Within your business, there are likely some offers that are more profitable than others. Placing more focus on selling these is a way to trim the fat and make more profit.
Improve Your Offer, Customer Experience And Advertising
Take a deep look to analyze existing strategies and update or put in place new ones. The offer, customer experience and advertising are areas of your business that have huge potential to change the balance sheet for the better.
Save Where Possible
Review your budgets. Are there areas where reducing costs won’t sacrifice quality or productivity? If so, make the required cuts.
Sometimes there is no other choice. However, if redundancies are necessary, let workers know well in advance, organize severance pay and support them in finding new employment. In the case of Safestyle UK, this didn’t happen which has added to the discontent from their now redundant workforce.
Lee Parkinson, GMB Union organizer, said, “More than 600 workers have been cruelly cut off from work, weeks before Christmas, with no guarantee that they will even get last week’s paycheck.”