In hard economic times, businesses often face the challenging decision of restructuring and downsizing. While this decision is primarily driven by financial imperatives, the method by which it is executed can have profound implications on a company’s people, culture, and overall workplace environment.
The process of restructuring and redundancy should not only focus on balance sheets but also on the very heart of the business: its employees. Here’s a guide to help businesses navigate these choppy waters with sensitivity and foresight.
1. Open and Transparent Communication
Before any major decisions are made, it’s essential to maintain an open line of communication with employees. Uncertainty breeds anxiety, so the more information you can provide about the reasons for restructuring and the process, the better. This transparency fosters trust, even in adverse situations.
2. Involve All Stakeholders
While top management might have the final say in downsizing decisions, involving representatives from various teams can provide different perspectives. Including employee representatives or union leaders in discussions can also help anticipate concerns and address them proactively.
3. Offer Support Through Career Transition & Outplacement Services
Making redundancies is difficult, but offering support to those affected can ease the transition. Consider providing services such as career coaching, resume workshops, and job placement assistance (via Harrisons). This not only aids employees in their next career steps but also reflects positively on the company’s reputation.
4. Consider Alternatives to Redundancies
Before making redundancies, explore alternatives. This could include:
• Temporary Reductions: Short-term wage cuts, leave, or reduced working hours.
• Re-skilling and Internal Mobility: Training employees for different roles within the organisation.
• Voluntary Redundancy: Some employees might prefer a severance package, especially if they were considering leaving.
5. Foster a Positive Environment for Remaining Employees
Post-redundancies, there’s often a decline in morale among remaining employees. They may fear further layoffs or feel survivor’s guilt. It’s crucial to:
• Reassure Them: Articulate the reasons behind the restructuring and how it positions the company for future stability.
• Invest in Team Building: Strengthen team bonds to ensure that the company culture remains robust.
• Focus on Well-being: Offer counselling or mental health support to address any emotional or psychological effects of the restructuring.
6. Stay True to Company Values
During tough economic times, the true character of a business is revealed. Decisions made should align with the core values of the company. This consistency reassures employees that even in the face of adversity, the company remains grounded in its foundational principles.
7. Continuous Evaluation
Post-restructuring, businesses should not become complacent. Regularly evaluate the effects of the changes made. Is the business more efficient? How is employee morale? What further supports can be provided? By continuously assessing, businesses can adapt and ensure long-term success.
Restructuring and downsizing, when necessary, should be approached with empathy, transparency, and a forward-thinking mindset. By focusing on people and culture alongside business imperatives, companies can not only navigate hard economic times but also emerge stronger, more cohesive, and more resilient.
For help with planning your organisational restructure, including downsizing and redundancies please contact Harrisons for specialist employee relations and change management advice, as well as career transition and outplacement support for your people.
Claire Harrison is the Founder and Managing Director of Harrisons, a flourishing HR consulting business that sprouted in 2009 from Claire’s passionate belief that inspiring leaders and superstar employees are the key success factor to any business. With over 20 years’ experience, Claire has worked as a HR Director of multi-national organisations, as a Non-Executive Board Director, and a small business owner. Claire’s corporate career includes working with companies such as BHP, Westpac, Fonterra and Mayne Nickless.
