Redundancy

What Is Redundancy?

In the context of human resources, redundancy is when an organization no longer needs a role performed. As a result, it becomes unnecessary to continue employing those who are performing that redundant role.

In some cases, redundancy means there are too many employees doing the same job, and the company needs to narrow down that number. In other instances, redundancy may happen because of operational changes, a pivot in the company mission or goals, or even outside influences such as a weak economy or a reduction in funding.

Why Do Redundant Roles Develop in the Workplace?

Redundancy can happen because of many different circumstances. Here are five common reasons why organizations end up with redundant roles.

Business Relocation

Redundant roles can develop if the business (or even a major office) decides to move from one location to another.

In some cases, employees may not have the means to pick up their lives and move near your company’s new location. If your organization doesn’t have a significant relocation assistance budget or program, this may lead to a need for temporary downsizing, which means keeping only those with the most critical roles.

Financial Issues

Organizations face financial headwinds for a number of reasons. If the organization is using government funding or relying on public donations to fund a project, and those funds decrease or are no longer available, you may not have the budget to pay employees who were working on that project.

Additionally, business leaders may decide to eliminate some non-essential roles when attempting to improve profit margins to attract or retain investors. The same may occur if the economy tanks and a business loses revenue as a result of the recession.

Mergers and Acquisitions

Company mergers and acquisitions can lead to redundant roles in a few ways. First, the acquiring company may already have the employees it needs to conduct business in a certain area. This may lead to having too many employees performing the same role. Some may need to be moved to other departments.

The acquiring company may also decide to move locations or pivot the acquired business’s model to something that better fits the umbrella corporation’s mission and goals. In these cases, employees may not be able to afford to move, may no longer be needed, or may need to upskill or reskill to work in a different department or on other types of projects.

Outsourcing and Offshoring

Research shows that over half of executives outsource business functions to third-party providers. In some cases, they may even decide to move operations (or certain parts of operations) overseas. Either way, employees who are fulfilling the roles that have been outsourced will likely be made redundant since the company has found the same labor for a more cost-effective price.

Updated Technology

Many businesses are undergoing a digital transformation. While this may make operations more efficient, the elimination of roles due to automation is becoming one of the world’s most common redundancy examples. In fact, 37% of businesses say that artificial intelligence has already replaced some of their jobs.

For example, self-service artificial intelligence tools like chatbots and automated phone assistants may reduce the number of customer service roles needed for a particular company, making part of the workforce in that department redundant.

When Redundancy Can Lead to Job Cuts

Redundancy doesn’t always mean that an employee has to leave the company, but that is a common occurrence. There are a few ways redundancy can lead to job cuts.

Layoffs

Layoffs usually happen when the business simply doesn’t have enough work to retain employees, either because the company isn’t doing well financially, the role itself is no longer needed, or there are too many employees doing the same thing.

Sometimes, these layoffs are temporary, as often occurs with businesses that experience seasonal upticks in customer traffic.

Downsizing

In some cases, businesses need to reduce their size all around. Unfortunately, this often comes with a permanent reduction in the workforce, commonly known as downsizing.

Downsizing can lead to redundancies if the unnecessary roles need to be cut. To reduce the amount of involuntary terminations and give employees greater agency, businesses can allow redundant workers to leave the company voluntarily. This can preserve a sense of goodwill toward an employer who needs to downsize teams.

Business Closure

Despite a business leader’s best efforts to keep the doors open, sometimes companies do shut down. This can be due to the business owner’s retirement or a lack of profitability throughout the organization. In these cases, there’s nothing that anyone can do to avoid redundancy and job cuts.

How to Identify Redundant Roles in the Workplace

Whether your company is preparing for layoffs or simply needs to shift its financial outlook, it’s important to be strategic about redundancies. Here are five steps your HR department can take to identify redundant roles and take the right actions to resolve the issue.

Conduct a Financial Evaluation

Companies must be on the lookout for redundancy in order to tighten budgets and increase profitability. To accomplish this goal, HR and business leaders can work together to determine what the company’s future financial picture looks like and how many roles it may need to reconsider.

This task involves an in-depth review of payroll and other financial records to determine a viable budget and decide on resource allocation.

Consider Which Roles Are Essential

Once you know how many roles you can keep and how many you may need to eliminate, you need to determine which roles the company simply can’t do without. These are the roles that are most likely to be saved when budget cuts occur.

To determine essential roles, it’s best to consider which job duties contribute the most toward achieving the company’s strategic mission and goals. Often, these are senior leaders and members of management who oversee operations and are responsible for moving the company in the right direction.

Determine Which Roles Contribute the Least

Lean financial times make it even more important to think about which roles in the company don’t have a direct link to business outcomes. For example, administrative roles like receptionists and secretaries can sometimes be replaced with upgraded technology that can take notes and direct callers to the right department. Roles that don’t contribute directly to growth will likely be the first to go.

Consider Who Can Take On Additional Responsibilities

Sometimes, the best way to identify redundant roles is to see whether you can give the role to a different employee and still get the same outcome. Can a department leader take on the same tasks as a project manager and still do the work well? If you’re answering “yes” to these questions, you probably have redundant roles.

In order to address these redundancies, consider whether employees have robust skill sets that can allow them to take on more than one role. For example, you may have a few graphic designers who also have a background in marketing. In this case, you may be able to downsize your marketing department and allow those designers to take on a dual role.

Best Practices for Reducing Redundancy

In every company, the goal should always be to retain as many employees as possible while still running a profitable and efficient business. Reducing redundancy is the key to meeting this goal. Fortunately, there are several things your HR and business leaders can do to keep redundancy at a minimum:

• Meet regularly with senior leadership to determine company goals and objectives and align HR strategy accordingly.
• Conduct frequent employee meetings where employees share current projects so you can determine their roles’ direct relationship to business outcomes.
• When financial issues arise, consider more temporary alternatives to terminating employees, such as furloughs or sabbaticals.
• Consider upskilling or reskilling redundant employees to equip them to take on new or additional roles within the company.
• Develop metrics to track results and pivot HR strategy as needed.

What does redundancy mean for your organization? For most, it should be a chance to evaluate HR practices and develop a better path forward when it comes to hiring, workforce development, and resource allocation. By remaining strategic about these decisions, HR managers can avoid excessive redundancy and help keep the business running smoothly.