Redundancy Rate
Definition
Redundancy Rate
Redundancy rate measures how many employees lose their jobs because a role is no longer needed, usually stated per thousand employees. It is job losses counted rather than estimated, and it is one of the few workforce numbers a government actually publishes.
Redundancy is distinct from resignation and dismissal — the role disappears, not the person’s suitability for it.
That distinction has legal weight in several markets. It decides entitlement to notice, consultation, and statutory payment.
For outsourcing buyers the rate carries a second meaning — a provider with a rising internal redundancy rate is restructuring, and restructuring providers rarely deliver stable service through the transition.
Key takeaways
- Redundancy rate expresses roles removed as a rate per thousand employees.
- It counts role elimination, not resignation, dismissal, or end of contract.
- National statistics agencies publish quarterly figures that give sector context.
- A provider’s own redundancy rate is a useful stability signal during due diligence.
How it works
Divide the number of employees made redundant during a period by total employment, then express the result per thousand employees. National agencies report it quarterly using household survey data rather than employer returns.
The internal version is calculated the same way but read differently. Inside a business it measures restructuring intensity rather than labour market conditions.
| Measure | What it counts | Where it comes from |
|---|---|---|
| Redundancy level | Number of people made redundant | Labour Force Survey |
| Redundancy rate | Redundancies per thousand employees | Level divided by employment |
| Voluntary share | Redundancies taken by choice | Internal records only |
| Redeployment rate | Staff moved rather than exited | Internal records only |
The Office for National Statistics reported a UK redundancy rate of 3.6 per thousand employees for April to June 2026, equal to a level of 106,000 people, in figures released on 18 August 2026.
That sits alongside a UK employment rate of 75.1% and unemployment of 4.9% for the same quarter. Read together, the three numbers describe whether redundancies are being absorbed by the wider labour market — or not.
Legal obligations run in parallel with measurement. GOV.UK describes redundancy as a form of dismissal that happens when employers need to reduce their workforce, carrying rights to redundancy pay, notice, consultation, and time off to look for work.
Examples
Redundancy activity looks different in a shrinking business, a restructuring provider, and an operation moving work offshore. Four cases show how the same rate arises from very different causes.
A UK retailer closing stores. Eighty roles removed from a workforce of 4,000 gives a rate of 20 per thousand. Consultation obligations applied because the numbers crossed the collective threshold.
A BPO provider consolidating sites. The internal rate rose to 14 per thousand during a two-site merger. The buyer’s due diligence flagged it before contract renewal.
A finance function automating reconciliation. Twelve roles disappeared while headcount stayed flat, because redeployment absorbed every affected person. The redundancy rate stayed at zero.
A manufacturer facing a demand fall. Voluntary redundancy took two thirds of the reduction. The headline rate looked identical to a compulsory programme, which is why the split matters. Consultation still applied because the numbers crossed the statutory threshold.
Related terms
Redundancy rate belongs with the workforce measures that describe how people leave and how staffing is planned. The terms below cover the alternatives, the planning, and the cost side.
- Attrition Rate: the broader measure of all staff departures.
- Employee Turnover: the voluntary and involuntary exit count combined.
- Workforce Management (WFM): the function that plans headcount against demand.
- Staffing Model: the structure a redundancy programme usually changes.
- Full Time Employee (FTE): the unit redundancy counts are normally expressed in.
- Distributed Workforce: the model that often follows site consolidation.
- Labor Cost: the figure redundancy programmes are usually meant to reduce.
FAQ
How is redundancy rate calculated?
Divide redundancies in a period by total employment, then express the result per thousand employees. National agencies use a rolling three-month window.
Is redundancy the same as being fired?
No. Redundancy removes the role, while dismissal relates to the individual’s conduct or capability, and the two carry different legal consequences.
What was the latest UK redundancy rate?
The Office for National Statistics reported 3.6 per thousand employees for April to June 2026, equal to 106,000 people.
Why do buyers ask a provider for its redundancy rate?
Because restructuring disrupts delivery. A rising internal rate often precedes attrition, knowledge loss, and missed service levels.
Does voluntary redundancy count?
Yes, it is included in the headline figure. Reporting the voluntary share separately gives a much clearer picture of what happened. Buyers reviewing a provider should always ask for that split.
How does redeployment affect the rate?
Staff moved to other roles are not redundancies. Strong redeployment can hold the rate near zero during significant restructuring.
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