How to support staff facing redundancy

Since the Autumn Budget in October 2024, online search interest in employee redundancy rights and pay has increased by 77%, according to research published by the Global Payroll Alliance in May 2025. This sizeable jump suggests that it is unfortunately a prominent issue for employees, so it is worthwhile employers looking at what support they can offer in this area.

Financial wellbeing support

Employees may need a range of financial wellbeing support during times of uncertainty or layoffs. This can include access to financial planning tools, budgeting resources, and financial education to help them manage their personal finances.

Some employees may choose to use redundancy to consider their next career move, while long-serving ones may want to take a break if their redundancy payment covers bills and outgoings for a few months, says Andy Wealthall, chief operating officer at wealth advisory firm Lifetime.

“Financial wellbeing support helps people understand their options,” he explains. ”By offering access to expert guidance, employers can empower former employees to make confident, informed decisions about their future.”

Employers should cover the core areas employees need to think about, such as entitlement in terms of statutory rights, taxation, because the first £30,000 of any redundancy payment is tax-free, and any other financial issues. These can include meeting bills and other daily costs of living, working out how long their current funds can support them for, and mortgage payments. Employers can offer support with contacting mortgage lenders for a payment holiday, for example.

Offering a series of seminars that talk through options for employees, typically carried out face-to-face within the workplace, may also be useful, says Jonathan Watts-Lay, director at Wealth at Work.

“Employers should also allow for follow-up questions regarding the structure of their redundancy package, what employees need to think about in terms of tax, and the payout they will receive,” he says. ”Organisations can help manage the state benefits system in terms of what it offers and how it operates, which will vary depending on their situations, as well as support with potential financial scams, which may arise following well-publicised redundancies and payouts.”

One-to-one guidance calls, often with a financial coach, can help, while regulated advice can be signposted for assistance with various financial issues and pensions, because a large redundancy payout a few years off state pension age could mean that an employee is able to retire early. Meanwhile, an online calculator tool can help staff to work out their financial situation following a payout.

Rachel Juley, director in the human resources practice in Gartner’s research and advisory division, adds: “Employers are increasingly offering matched charitable donations, paid time off for volunteering and employer-sponsored giving programmes. These not only support financial wellbeing, but also strengthen employees’ ability to navigate the personal and professional impacts of this change.” 

Additional supportive benefits

Some employers may choose to extend certain employee benefits as part of the redundancy package, even after someone has left the organisation, as part of a caring gesture and maintaining goodwill.

“This might include continued access to financial planning services, benefits platforms, travel passes, eyecare vouchers, or parking permits,” says Lifetime’s Wealthall. “Where possible, avoiding a hard stop on benefits can soften the impact of redundancy and help people feel supported as they navigate what comes next.”

Employers can also assist with job searches, career transition services and recommend outplacement support, which can help employees with CV writing and job interviews.

“Signposting to external resources such as relevant websites and job centres can help, along with any support available through benefit providers,” suggests Watts-Lay. “Ancillary support, such as advice through Citizens Advice Bureau, can help employees dealing with financial hardship.”

Morale and wellbeing impact

Gartner’s October 2024 research found that redundancies can severely affect the remaining workforce, with 57% reporting a decline in morale, and 52% experiencing negative effects on their wellbeing. To combat this, employers could offer access to mental health resources, counselling or advice services for those affected.

Keeping everyone informed about the rationale for the redundancies, the process and what the future holds, helps to reduce anxiety and uncertainty, adds Juley.

“Managers and human resources partners play a critical role by acknowledging concerns and providing clarity around expectations and priorities,” she explains. ”They should create an environment where employees feel heard and valued, tackling feelings of fear, burnout, and detachment. This can reinforce employees’ sense of purpose and strengthen engagement through challenging times.”

It is crucial for employers to approach redundancies with care and empathy, recognising the impact it has on both departing staff and those who remain. Even when employees opt for voluntary redundancies, there is still disruption to overcome.

“HR teams can help with wellbeing support such as employee assistance programmes or mental health first aiders,” says Wealthall. “They can opt to extend these benefits for three to six months, or even until staff are in another role. While an employer isn’t directly responsible for employees’ wellbeing once they have been made redundant, it is morally and ethically the right thing to do.”

While there are various ways employers can support employees facing redundancy, it is important to ensure they understand how they will be affected and what their next steps could be.