When a business enters administration, the balance sheet gets the attention and the workforce decides the outcome. A site with stock, a licence and a booking book but no staff cannot open. A site with a demoralised team that has heard nothing for three days will open badly, and customers will notice within a shift. Retention through the first fortnight is therefore not a human resources afterthought — it is the single largest determinant of whether trading on works.
Start with the fact that people already know. By the time an appointment is made, wages have usually been late, suppliers have been arriving unpaid, and someone has seen a notice or a news item. Silence in that environment is not neutral; it is read as confirmation of the worst version of events circulating in a staff group chat. The first communication should therefore come quickly, in person where possible, and be delivered by whoever is now operationally in charge rather than a remote voice.
What that message needs to contain is narrow and specific. Who is now running the business day to day. That the business is continuing to trade for now, and what that means for tomorrow's shift. How work done from this point forward will be paid, and when. Where employees stand on wages already owed and who will contact them about it. When the next update will come — and then that update actually arriving, even when there is nothing new to report. What it must not contain is reassurance that cannot be guaranteed. A promise about job security that fails a week later costs more trust than the difficult truth would have.
The second priority is identifying the people the operation genuinely cannot lose. Every business has a handful of them, and they rarely map to the org chart: the head chef, the duty manager who holds the rota together, the engineer who knows the plant, the administrator who understands the booking system. They are also the most employable people in the building and will be receiving approaches within days. They should be spoken to individually, told candidly what their role is in the period ahead, and given a reason to stay that is honest — usually a defined role, direct access to the person in charge, and a realistic picture of the timescale.
The third priority is the rota. In an insolvency the rota comes under pressure from both directions at once: resignations remove cover while trading volumes become unpredictable. The instinctive response — plugging every gap with agency staff — is expensive, erodes standards and rarely fixes the underlying problem. Better practice is to rebuild the rota against realistic post-appointment demand rather than pre-appointment habit, consolidate shifts, reduce opening hours where a session genuinely loses money, and cross-cover between sites where the group has more than one. That is ordinary operational discipline, and it is where payroll and labour controls do most of their work.
Labour cost control in this period needs weekly visibility, not monthly. Hours against sales, by site, by department, reviewed every week with a named person accountable. Agency spend tracked separately so it cannot hide inside a total. Holiday balances monitored, because accrued leave taken in the wrong week can strip a site of supervision. Overtime authorised in advance rather than discovered in a pay run. None of this is sophisticated, but it is frequently absent in businesses that have reached administration, and installing it takes days rather than weeks.
There are statutory and consultation obligations in the background — redundancy consultation thresholds, notice, protective awards, TUPE information and consultation where a sale is in prospect, and the employee claims route through the Redundancy Payments Service. Those sit with the office holder and their advisers, and nothing an operational manager does should cut across them. What the operational side contributes is accurate data: reliable headcount, contracted hours, start dates, holiday accrual and site allocation. Insolvent businesses very often have unreliable employee records, and cleaning them up early makes every subsequent legal and payroll process faster.
Where redundancies do happen, how they are handled changes the performance of everyone who remains. People watch the way departing colleagues are treated and calibrate their own decision to stay accordingly. Being clear about the process, timely with information and present to answer questions is not sentiment; it is what keeps the remaining team functioning through the following weeks.
It is also worth being deliberate about what remaining staff are asked to do. Teams in this situation are usually working short-handed, dealing with anxious customers and fielding supplier calls they cannot answer. Removing avoidable friction — a single named contact for supplier queries, a script for customer questions, decisions made on the spot rather than escalated into a vacuum — has an outsized effect on morale, because it demonstrates that someone is actually in charge.
The pattern across successful trading administrations is consistent: a visible, experienced operator on site from the first day, honest communication on a predictable rhythm, a rota rebuilt to reality, and labour cost reviewed weekly. That is what AJS puts in place for insolvency practitioners and administrators — experienced managers who have run these operations before, deployed within days. If you are assessing whether an operation can hold together, our operational support for insolvency practitioners starts with the people already in the building, and continues through the wider trading assessment.