Redundancy: Nightmare or opportunity
A meeting is suddenly cancelled, you are called to head office at short notice ‘oh by the way bring your laptop’ you are told.Out of the blue you are in a solicitor’s office having a compromise agreement reviewed and thinking of your next career move. It is formally called redundancy. Being released, let go, downsized and right sized are a few other terms.
I see more and more people going through these challenges, companies trying to get their go to market model right. Changing the size of a team the products sold and size of territories. A new product does not go well, a company is taken over, merged or acquired. The funding round was not as successful as it could have been, the investors want out and you can’t raise any other equity, you face does not fit and your boss wants you out.
These are some of the harsh realities of modern day business. The medical device sector is somewhat protected from these ills, generally it continues to grow and healthcare systems continue to receive strong investment.
So what’s it all about, is being made redundant a nightmare or an opportunity, I have spoken with a number of old colleagues and contacts and using my own experience, yes I have been there too, it can clearly be both.
The main legislation concerning redundancy can be found on the various websites referenced at the end, as can advice on statutory payments, what is tax free and compromise agreements.
People are not actually made redundant! It is the role that you are doing that is made redundant. An employer has to enter a period of consultation with an employee during which they should seek to offer suitable alternative employment.
You have the right to a redundancy payment if you're an employee who has worked continuously for your employer for at least two years.
There may be an arrangement in your contract for how redundancy pay will be worked out. However, if this gives you less than the statutory pay, the statutory amount applies. The first £30,000 of any termination payment (including redundancy pay, notice pay etc) is normally tax-free.
One often hears employees who have been made redundant or signed a compromise agreement claim to have been poorly treated, "I gave them all those years and all I got was 3 months money."
In fact most employers actually give more than they are required to.
If you are 35 with 10 years service then the statutory payment required by your employer is 10 weeks pay capped at a maximum of £310 per week a total of £3,100.
About a months salary and bonus for many successful medical device sales people.
Most companies of course wish this to be as painless a process as possible. They are concerned about negative ‘noise’ in the marketplace.If they are savvy they will come to a sensible compromise with their staff.
A compromise agreement is often used in redundancy where the reasoning behind the decision to release an employee is not clearly defined and may be contentious. It is a single agreement setting out the financial and all other terms on which the employment relationship will end.
In order for the compromise agreement to be valid, certain formalities must be fulfilled and the employee is then unable subsequently to make a claim in the courts or an employment tribunal. Compromise agreements are often more generous for the employee as a reward for ‘going quietly’
Redundancy is generally a shock, we never think it will happen to us. You can initially be very angry and upset at the decision. The truth is it is not your fault, redundancy happens to all employee types, high acheivers are not immune.
It is key to take the emotion out of the situation quickly and move positively into managing the consequences. We all like to be in control of our destiny, our jobs often define what and who we are. With our status and our perceived worth threatened, it is useful to take a step back and consolidate.
Know who you are
One of the key things to consider is ‘understanding yourself’. One way of doing this is to take a day away from everything, colleagues, friends and partner.
Ask yourself these questions:
- Where does your job and career fit into what you want ?
- Where does your job and career fit into your life ?
- What is my value function ?
Our jobs often define so much of who we are, our status, our ego, they define how other people see us, we talk to friends down the pub, hows work going? Still travelling? When’s the next new car due? How much is your bonus this year?
When you have answered some of these questions you have to start to find what you are looking for next.
Being out of work does not mean you have suddenly lost any of your skills and abilities, you simply have different objectives and tasks to apply them to.
It is important to keep busy, set self goals and targets, not just for finding a new role but for keeping fit, seeing friends and family, taking a break somewhere.
Many people think because they are out of work they should not have any fun, well there needs to be a sensible balance. If you are fortunate enough to have enough money to live on for a few months you can do things you have always wanted to, but never had the time.
You may find a different side to yourself.
Of course the loss of job, status, car and earnings can have a devastatiing effect on us and our family. Keeping active is the key, continue to have meetings with ex colleagues or other key stakeholders in your marketplace, such as recruiters and training companies. Ensure when you have these meetings you treat them seriously, you prepare, you wear a suit, you keep those good habits and traits that brought you previous success.
It is easy to feel guilty about not working, if you know and understand what you are really looking for and you are actively seeking this then taking some time out for yourself is a healthy release.
For many people it is a relief when it happens, they have not been happy, not got on with their boss, did not wish to relocate to the new office, getting home to late, did not like the travelling, the product was not doing very well!. For a number of ex colleagues it has led to bigger and better roles each time with nice pay increases. For myself it led to selling my house. getting married, travelling around the world and starting out as an independent consultant. For others it can mean paying of the mortgage, a new car, a nice holiday, a new kitchen, or just a lump sum investment.
Speaking to number of people who have gone through this process almost all are in agreement about some key priorities.
- Negotiate the best settlement, seek legal advice
- Update your CV
- Contact trusted recruiters
- Mind map all the contacts you have worked with in the past, noting their details, your working relationship and how well you feel you know them
- Call the contacts with whom you would work again and see whether they can assist your job search
- Use the support structure of family and friends
- Once the decicion is made accept it and look forward
- It will be tough at times
- You will not neccessarily get the first job you go for
- You will learn from the process
In todays constantly shifting employment market we all need to be sure we are flexible and open to change, you never know when it may happen.
Useful websites used in the research for this article.