nightmare or opportunity?
Have you ever dreamt of an HR manager handing you a P45, and woken up afraid to look behind you in case you saw your career? Ian Sandison of Remtec explains why redundancy is not always to be feared.
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 of the other printable terms.
I see more and more people going through this as companies struggle to get their ‘go to market’ models right, changing the team size, the products sold and the territory covered. 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. Your face doesn’t fit and the boss wants you out.
These are some of the harsh realities of modern-day business. The medical devices sector is somewhat resistant to these ills: generally it continues to grow, and healthcare systems continue to receive strong investment. But being resistant doesn’t make it immune.
So what’s it all about? Is being made redundant your worst nightmare, or can it be an opportunity? What I’ve learned from a number of former colleagues and from my own experience – yes, I’ve been there too – proves that it can be both.
Know your rights
The main legislation points concerning redundancy can be found on the websites listed below, as can advice on statutory payments, relevant taxes and compromise agreements.
People are not actually made redundant! It is the role 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 an employer for at least two years. There may be an arrangement in your contract for redundancy pay. However, if this gives you less than the statutory amount, the latter 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 claiming to have been poorly treated: “I gave them all those years, and all I got was three months’ money.” In fact, most employers give more than they are legally required to. If you are 35 with 10 years’ service, the statutory payment required by your employer is 10 weeks’ pay capped at a maximum of £310 per week: a total of £3,100. That’s about a month’s salary and bonus for many medical device sales people.
Don’t rock the boat
Most companies, of course, wish redundancy to be as painless 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 a compromise agreement to be valid, certain formalities must be fulfilled. The employee is then unable subsequently to make a claim in the courts or an employment tribunal. Compromise agreements often reward the employee for ‘going quietly’.
Redundancy is generally a shock: we never think it will happen to us. You can initially be very angry and upset. But the truth is, it is not your fault. Redundancy happens to all employee types, and high achievers are not immune.
It is crucial to take the emotion out of the situation quickly, and move positively into managing the consequences. Our jobs often define who we are, socially as well as professionally. With our status and perceived worth threatened, it is useful to take a step back and consolidate.
A key thing to consider is ‘understanding yourself’. One way of doing this better is to take a day away from everything: colleagues, friends and partner. Then ask yourself these questions:
• Where do my job and career fit into what I want?
• Where do my job and career fit into my life?
• What is my value function?
When you have answered these questions, you have to start deciding what you are looking for.
Being out of work does not mean you have suddenly lost your skills and abilities: you simply have different objectives and tasks to apply them to. It is important to keep busy and set yourself goals, not just for finding a new role but for keeping fit, seeing friends and family, taking a break.
Many people think that if they are out of work they should not have any fun. There needs to be a sensible balance. If you have enough money to live on for a few months, you can do things you always wanted to do but never had the time. You may discover a different side to yourself.
Redundancy is generally a shock: we never think it will happen to us. It is crucial to take the emotion out of the situation quickly, and move positively into managing the consequences.
Of course the loss of job, status, car and earnings can have a devastating effect on you and your family. Keeping active is key. Continue to meet with ex-colleagues or other key stakeholders in your marketplace (such as recruiters and training companies). Make sure you take these meetings seriously: you prepare, you wear a suit, you maintain the good habits that brought you 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 it, taking some time out for yourself is a healthy release.
Priorities and realities
When I spoke to a number of people who had gone through redundancy, almost all of them were 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 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.
In today’s constantly shifting employment market, we all need to be sure we are flexible and open to change. You never know when redundancy may strike. Keep these realities firmly in mind:
• Once the decision is made, accept it and look forward.
• It will be tough at times.
• You will not necessarily get the first job you go for.
• You will learn from the experience. Ian Sandison is a Director of Remtec Search and Selection as well as an independent medical device consultant. He spent many years in medical device sales and marketing. For more information, visit www.remtec.co.uk and www.pandiassociates.co.uk. Useful websiteswww.direct.gov.ukwww.cipd.co.ukwww.hmrc.gov.uk/guidance/redundancy-factsheet.pdfwww.dti.gov.uk/employment