I must admit I’ve never heard of this, but offering sabbaticals as a way to avoid redundancies is a good concept to explore! The idea is explained in this article from People Management.
The case studies (from the article):
Instead, the process of genuinely seeking to avoid redundancies can reap its own rewards: we saw it back in the economic crisis when business leaders and innovators became very creative about addressing the immediate need to reduce their biggest overheads (salaries) while protecting talent pools and employee relations. In industries where express contractual rights to temporarily ‘lay off’ workers would not work to avoid dismissals, offering voluntary sabbaticals did, and still can.
BT was one of the first, way back in 2009, when it offered a year’s sabbatical on 25 per cent pay to avoid further redundancies, in the same way you would offer or invite applications for voluntary redundancies. Lonely Planet adopted a similar scheme, saving a reported $250,000 on payroll through the use of one- to six-month sabbaticals on 15 per cent pay.
The benefits are obvious: you avoid the stigma, unnerving your staff and reputational damage associated with redundancies; you keep hold of the talent you have nurtured; you avoid future recruitment costs when the business is ready to grow again; and best of all, you avoid the risk of tribunal litigation and spending time with lawyers batting back unfair dismissal claims, however speculative they may be.
This may not be an option only for large companies – if you’d like to discuss it with me please get in touch!