Navigating Business Closures: How HR Can Support Employers and Employees
2024 presented unprecedented challenges for businesses across Ireland. With over 223 recorded business insolvencies in the first quarter alone—more than double that of 2022—and significant closures in the hospitality and retail sectors, many employers faced difficult decisions. For instance, 612 food-serving hospitality businesses permanently shut down in 2024, with the Government’s failure to reduce the VAT rate to 9% cited as a significant factor by many business owners. For their closure.
For companies navigating such turbulent times, having a competent Human Resources consultant to rely on is critical in managing redundancies and exploring alternatives to closure. Here are some of the main ways HR can assist:
Exploring Alternatives to Redundancy
HR professionals can help businesses consider viable alternatives to redundancies. Options such as short-term layoffs or unpaid leave may offer temporary relief. Short-term layoffs reduce payroll expenses while retaining employees for when conditions improve. Similarly, unpaid leave can allow employees to travel, pursue education, or focus on personal goals, helping businesses cut costs without severing ties with staff. Temporary Lay-Off is another option for employers and this occurs when an employer says that they have no work for an employee for a temporary period and therefore the employee will not be paid. If a lay-off goes on for a certain period, an employee may be entitled to claim for redundancy.
Ensuring Compliance and Fairness
Redundancy is a complex process governed by laws such as the Redundancy Payments Act 1967-2014. HR support is essential to ensure compliance, mitigate risks, and maintain fairness. This includes defining objective selection criteria, documenting business reasons for redundancies, and providing statutory redundancy payments where applicable.
Providing Employee Support
For those impacted, offering practical and emotional support is vital. This includes access to Employee Assistance Programs (EAPs), career coaching, and CV workshops to help them transition into new roles confidently. Clear, consistent communication during this period reassures employees, reduces uncertainty, and demonstrates care for their well-being.
Planning for Long-Term Resilience
While addressing immediate challenges, HR can help businesses build resilience for the future. Upskilling remaining staff, implementing digital tools, and creating a culture of adaptability are key strategies to emerge stronger.
At GHR Consulting, we are here to help businesses navigate the complexities of closures or redundancies while supporting employees every step of the way. Whether exploring alternatives or planning for the future, we provide the expertise to guide you through uncertain times.
