What is redundancy?

In the context of human resources, redundancy occurs when an organization no longer needs a role. As a result, it becomes unnecessary to employ the people who were performing that redundant role.

In some cases, layoffs mean there are too many employees doing the same job, and the company needs to reduce that number. In other cases, layoffs may be due to operational changes, changes in the company's mission or goals, or external influences such as a weak economy or a reduction in funding.

Why do redundant roles develop in the workplace?

Redundancy can occur due to many different circumstances. Here are five common reasons why redundant roles occur in organisations.

Transfer of business

If a business (or even a head office) decides to relocate from one location to another, redundant roles may develop.

In some cases, employees may not have the means to upend their lives and move to your company's new location. If your organization doesn't have a significant relocation assistance budget or program, this may necessitate a temporary staff reduction, which means keeping only those in the most critical roles.

Financial issues

Organizations face financial challenges for a variety of reasons. If the organization is using government funding or relies on public donations to fund a project, and those funds dwindle or are no longer available, you may not have the budget to pay the staff working on that project.

Additionally, business leaders may decide to eliminate certain non-essential roles when attempting to improve profit margins to attract or retain investors. This may also happen if the economy declines and the business loses revenue as a result of the recession.

Mergers and acquisitions

Company mergers and acquisitions can create redundant roles in a number of ways. First, the acquiring company may already have the employees it needs to run the business in a particular area. This can lead to multiple employees performing the same role. Some may need to be moved to other departments.

The acquiring company may also decide to change the location or change the model of the acquired business to something that better suits the mission and goals of the umbrella corporation. In these cases, employees cannot afford to relocate, may no longer be needed, or may need to upskill or reskill to work in another department or other types of projects.

Outsourcing and Offshoring

Research shows that  more than half of executives  outsource business functions to third-party providers. In some cases, they may even decide to move operations (or parts of operations) overseas. Either way, employees fulfilling the outsourced roles will likely be made redundant because the company has found similar workers at a more cost-effective price.

Updated Technology

Many businesses are going through digital transformation. While this can make operations more efficient, the loss of roles due to automation is becoming one of the most common redundancy examples in the world. In fact,  37% of businesses  say that artificial intelligence has already replaced some of their jobs.

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

When redundancy may lead to job cuts

Layoffs don't always mean that the employee will have to leave the company, but it is common. There are a few ways that layoffs can lead to job cuts.

Layoffs

Layoffs  typically occur when a business does not have enough work to retain employees, either because the company is not performing well financially, or the role is no longer needed, or there are too many employees doing the same job.

Sometimes, these layoffs are temporary, as is often the case with businesses that experience a seasonal increase in the number of customers.

Downsizing

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

Reductions can lead to layoffs if redundant roles need to be cut. To reduce the amount of involuntary dismissals and give employees more agency, businesses can allow redundant employees to voluntarily leave the company. This can maintain a sense of goodwill towards the employer who needs to reduce teams.

Closure of business

Despite a business leader's best efforts to keep the doors open, sometimes companies close. This may be due to the retirement of the business owner or a lack of profitability throughout the organization. In these cases, there is nothing anyone can do to avoid layoffs and job cuts.

How to identify redundant roles in the workplace

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

Perform a Financial Assessment

Companies should seek redundancies to reduce 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 a thorough review of salary and other financial records to determine a viable budget and make decisions on resource allocation.

Consider which roles are essential

Once you know how many roles you can keep and how many you may have to eliminate, you need to determine which roles the company can't do without. These are the roles that are most likely to be saved if budget cuts are made.

To determine the necessary roles, it is best to consider which job responsibilities contribute the most to 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

In times of financial crisis it becomes even more important to think about which roles in the company are not directly tied to business results. For example, administrative roles such as receptionists and secretaries can sometimes be  replaced with advanced technology  that can take notes and route callers to the right department. Roles that do not directly contribute to growth will be the first to be eliminated.

Consider who can take on additional responsibilities

Sometimes, the best way to identify redundant roles is to see if you can assign the role to another employee and still achieve the same results. Can a department head perform the same tasks as a project manager and still do the job well? If you're answering ""yes"" to these questions, you probably have redundant roles.

To address these redundancies, consider whether employees have strong skill sets that could allow them to perform more than one role. For example, you may have some graphic designers who also have a background in marketing. In this case, you could downsize your marketing department and allow those designers to serve in a dual role.

Best practices for reducing redundancy

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

• Meet regularly with senior leadership to set company goals and objectives and develop HR strategy accordingly.
• Hold frequent staff meetings where employees share current projects so you can determine the direct relationship of their role with business results.
• When financial problems arise, consider temporary options such as furloughs  or leave  rather than laying off employees.
• Consider upskilling or reskilling redundant employees to prepare them for new or additional roles within the company.
• Develop metrics to track results and alter HR strategy as needed.

What do redundancies mean for your organization? For most, this should be a chance to evaluate HR practices and develop a better way forward in terms of hiring, workforce development, and resource allocation. By being strategic about these decisions, HR managers can avoid excessive redundancies and help keep the business running smoothly.