From my experience - the way change management/staff surplus is handled (eventually leading to redundancy) is as much or more important that the cash.
Our practice is always that redundancy is the last option, behind reconfirmation, redeployment, natural attrition, retraining (within reason), and early retirement. This is enshrined in our contracts and policy.
How you advise, support, counsel and involve employees in the process has huge impact on how they feel about you as an employer - if you have a reputation as an employer for turning up on Friday with a load of DCM letters (Don't Come Monday) there will be very little you can do in the way of cash to make up for that. Never underestimate the amount of work invovled in dealing fairly, openly and supportively with employees in this situation (if possible, dedicate your time to this task only or assign a team to ensure it gets done).
Use career counselling, outplacement support, financial advice (how not to blow your redundancy in two weeks and then be poor and jobless). We got good feedback from employees and other local employers when we sent details of good staff (with their permission) to prospective new workplaces along with our recommendation and clarification that redundancy was no reflection of the esteem these employees were held in by us. (sometimes you just loose a contract or complete a huge project and it hurts the whole company!).
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