When the going gets tough, tough decisions need to be made. Based on our experience, this has been a tough year for many SME’s. And for some, the unavoidable and unfortunate conclusion has been to let some people go.

As a business leader, you know that the road to growth isn’t always smooth. Sometimes, despite your best efforts, sales decline, demand falter, and operations slow. In these moments, tough decisions must be made to protect the future of your business; it is also one of the most difficult decisions you will face.

This challenge is particularly acute for small and medium-sized enterprises (SMEs), where every team member plays a critical role. Redundancies not only test your business’s resilience but also demand your leadership to be not only empathetic, but also strategic, and decisive.

We are proud to say that we have been able to help our clients successfully navigate through difficult times as well as providing support when the going is good. Read below for a summary of what we have learned.

How you manage the process can have a huge impact.

If managed poorly, redundancies can damage team morale, weaken company culture, and even lead to legal issues. But when approached thoughtfully and with empathy, downsizing can allow those who stay to feel motivated and supported, while those who leave feel respected and valued.

In this blog, we’ll share strategies for SME leaders to navigate redundancies with care—helping you keep your team strong, and morale high while supporting everyone involved, including yourself.

 

REDUNDANCY DEFINED

 

According to Fair Work, redundancy occurs when an employer no longer needs anyone to perform a particular role. This could happen due to financial difficulties, restructuring, or changes in the industry.

 

WHAT REDUNDANCY IS NOT

 

It’s important to acknowledge that redundancy is different from other types of employment termination.

It is not about the employee’s job performance, behaviour, or misconduct. If an employee is let go due to poor performance or breaking company rules, that’s a dismissal, not a redundancy.

Redundancy is also not a temporary decision. It is permanent, meaning the role is no longer required, and the employee’s position will not be reinstated later on.

Additionally, redundancy is not about cutting jobs to save costs without addressing the underlying business issues. A genuine redundancy is tied to the business’s long-term needs and future sustainability.

 

HELPING EMPLOYEES FIND THEIR PATH AFTER REDUNDANCY

 

Redundancy can be a difficult experience, bringing both financial uncertainty and emotional distress. Job loss can deeply impact an individual’s sense of identity and self-worth, leading to emotions like shock, anxiety, or even depression.

As a leader, it’s essential to provide strong support during this transition. Addressing the emotional and practical aspects of redundancy is important to help the outgoing employees move forward.

For SMEs, while budgets may limit financial assistance, there are several non-financial ways to offer valuable support:

• Offering access to Employee Assistance Programs (EAP) or community-based counselling services can provide essential mental health support, helping individuals process their feelings and move forward during this challenging time.
• You can play a crucial role by leveraging your network to help the affected employee find new opportunities. By recommending them to other leaders, you can open doors and create valuable connections.
• Suggesting relevant training and upskilling opportunities can enhance redundant employees’ career prospects. While SMEs may not be able to directly fund training programs, pointing employees toward government-subsidised courses or free online resources is a valuable gesture that empowers them to build new skills.
• Engaging the departing employees with outplacement services that offer resume reviews, interview coaching, and other job search resources to support their transition.

At Howardco, we offer personalised coaching sessions and resume revamps to empower employees impacted by redundancy. Our tailored support helps them identify their next career steps and boosts their confidence and success rate as they move forward.

For more guidance on supporting your outgoing employees during redundancy, click the button below to gain access on our Redundancy Process Checklist for free.

 

TIPS TO MAINTAIN EMPLOYEE ENGAGEMENT

 

While much focus is given to employees whose jobs have been made redundant, it’s equally important for SME leaders to support those who will remain. These employees often experience “workplace survivor syndrome”—a mix of negative emotional responses that often follow redundancies.

Those left may feel guilt for retaining their jobs while their colleagues did not, anxiety about their own job security, and distrust towards the organisation.

Leaders must recognise these challenges and actively support their teams to prevent further emotional fallout.

Here’s how you can help employees navigate this transition:

• Regular One-on-One Check-Ins: Offer a safe space for your people to express concerns and emotions. Focus on listening and empathy to help them process the changes.
• Transparent Communication: Keep the team informed about the organisation’s future direction and the reasons behind the layoffs. Clear, honest communication can reduce uncertainty and build trust.
• Access to Support Services: Provide access to Employee Assistance Programs (EAPs) and mental health resources, such as stress management workshops or professional counselling, to help employees cope with the emotional aspects of redundancies.

 

RECOGNISING AND SUPPORTING SME LEADERS MANAGING REDUNDANCIES

 

SME leaders often face significant emotional and mental strain when making redundancy decisions. Balancing the financial stability of your business with the well-being of your people, all while maintaining your own resilience, can be overwhelming.

The emotional toll on leaders can include feelings of guilt, anxiety, isolation, and decision fatigue, which may hinder their ability to lead effectively. To help leaders navigate this challenging period, it’s essential to provide support that enhances their decision-making abilities and emotional stability.

Here are practical ways to assist SME leaders during redundancies:

• Networking Groups: Connecting with other leaders through local business networks or industry groups provides a valuable opportunity to share experiences, exchange resources, and gain support. These connections can help you feel less isolated and more empowered as you navigate challenges.

• Leadership Training: Participating in leadership development programs focused on crisis management, emotional intelligence, and resilience can strengthen your ability to support your team and make well-informed decisions during layoffs. Continuous professional development helps you stay adaptable and equips you to handle uncertainty with confidence.
• Coaching and Mentoring: Engaging with a coach or mentor can be invaluable during times of uncertainty. Coaching provides a confidential space to download issues and concerns, improve decision-making, and build resilience. A mentor who has navigated similar challenges can offer practical insights and emotional support, helping you approach redundancies with confidence and clarity.

At Howardco, we offer executive coaching to help leaders like you navigate complex business challenges, such as redundancies, and create high-performance cultures. With senior leadership experience behind us our tailored coaching sessions focus on enhancing your leadership skills and ensuring sustainable success, especially in difficult times.

Additionally, incorporating practices like mindfulness, meditation, and physical activities into your routine can be incredibly effective in enhancing your mental clarity and stress management while maintaining your own emotional and mental well-being.

 

HOWARDCO IS HERE TO SUPPORT YOU AND YOUR TEAM THROUGH CHALLENGING TRANSITIONS

 

At Howardco, we understand the sensitive nature of managing redundancies and the unique challenges they pose to SME leaders. Our team provides practical support on effective processes, and expert guidance, empowering you to lead through change with empathy, professionalism, and confidence.

Whether it’s offering strategic support to outgoing employees, building resilience among remaining team members, or equipping you as a leader to make thoughtful, impactful decisions, Howardco is here to help you build a resilient business culture that thrives through transitions.

Email us at info@howardco.com.au to discuss how we can support your team through changes or download our Redundancy Process Checklist for expert insights and practical strategies. Together, we’ll find the best path forward that enables both your business and your people to thrive together.

 

HOWARDCO READING RECOMMENDATIONS

 

• Dr. Lise Saugeres and Warren Howard: How to Manage the Stress of Change – Part 1
• If You Don’t Know, You Don’t Know
• 5 Tips to Make Your Next Staff Conference a Success