There was a 184 percent increase from June to July in the number of inbound queries from employers looking for advice around redundancies.

One of these areas that businesses must look at before making any decisions is how much staff redundancy will cost.

Despite it being a decision most employers do not take lightly, this increase was nonetheless seen, according to new research from Citation.

As inflation continues to surge and worries around an incoming recession grow, SMEs are starting to brace for widespread redundancies.


What factors are contributing to this?

There are many factors to consider when costing this up, such as an individual employee’s length of service, age and salary, and this can lead to confusion amongst business owners. 

Gill McAteer, director of employment law at Citation, said: “These are very challenging times for businesses, with inflation of goods and services, including the energy crisis and economic uncertainty causing worries for firms of all sizes, but in particular SMEs.”

Last month alone, the Office of National Statistics (ONS) found that more than a quarter (26%) of UK businesses cited “inflation of goods and services prices” as the main concern for their business, and with inflation likely to rise further, this statistic is likely to move the same way.

Gill continued: “Although it is not taken lightly by businesses, as they look to build resilience, redundancy is a common measure used. Whilst it can be an effective way to cut costs, there are other options out there that should be considered first.”

“Not only do business leaders owe it to their workforce to look at all options before redundancy, it can often end up costing them more in redundancy packages, than if they looked at other potential options such as a temporary change in working hours, reduced hours or changes to terms and conditions.”


Which sectors are expected to see the most change?

Whilst worries around redundancy seem to be affecting all industries, the employment experts have noticed higher rates in specific industries.

With retail most affected by inflation rates and consumers cutting back spending due to the cost of living prices, Citation saw a huge rise of 426 percent of SMEs in this sector looking for help on how to go about making redundancies.

This was followed by the manufacturing sector at 165 percent and, surprisingly, the care sector at 168 percent.. 

Gill continued: “Whilst some of these figures, particularly in the care sector, could be attributed to factors outside of the cost of living and inflation, such as funding, the pandemic and Brexit threatening business viability, the current economic situation is accelerating business decisions on how they will cut costs.”






Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.