Five phases of good redundancy mangement

first_imgAlthough redundancy will always be an uncomfortable experience for everyoneinvolved, effective management can smooth the process and, in some instances,can remove the need for redundancies altogether. Sylvia Crossley reportsRedundancy is never an event that anyone wishes to manage. However, as soonas it appears on the horizon, it’s time to take action and start working ondamage limitation for those who may be affected, the company, and the remainingstaff. Good redundancy management should begin when the initial warning signs ofpotential redundancies come to light. Early attention can sometimes fend offthreatened redundancies altogether. Phase 1: Change management The reasons for threatened redundancies are many and varied. It may be dueto a market downturn, a company merger, falling profits, a cash flow crisis,outsourcing or the loss of a major contract. What these situations have in common is that each requires swift attentionand will lead to some form of change management before the redundancies aredecided. All the procedures and principals of good change management willapply. Strategies will need to be revisited, trends must be carefullymonitored, new plans need to be drawn up, and above all, people will need to bekept informed. Where a collective redundancy situation (20 or more staff to be maderedundant) is feared, staff representatives must be consulted within thestatutory time frame. However, explaining the situation early on to employeesis good practice, regardless of the numbers affected, and has a variety ofbenefits. It: – Gives you control over what, when and, most importantly, how informationis put across – Avoids damaging rumours and innuendo – Rallies support for change and unites staff and senior management in acommon fight for survival – Provides an opportunity for ‘grass-roots’ staff to offer cost-cutting andefficiency suggestions – Makes any subsequent efficiency and/or cost-cutting measures morepalatable – Lessens the shock and reaction if and when redundancies do have to be made– Fosters an environment of honesty, trust and respect Clearly, communicating this information to staff must be carefully managedand controlled to avoid any additional damage to the company, or panic amongthe workers. However, there are many success stories from companies who haveinvolved their staff members, including voluntary pay cuts initiated by staffmembers. Peer pressure is far more compelling and effective than managementultimatums, however couched. Phase 2: Minimising redundancies Having developed an outline plan in consultation with all the pertinentmanagers and operatives, if redundancies are required, the next phase involvescarefully examining all avenues for minimising redundancies and their damagingeffects. Of all the changes that can occur in the workplace, redundancy createsthe most negative response. Minimising the job cuts and being seen to be makingevery effort to avoid them altogether is crucial. The avenues open to you willvary according to the size, situation, and nature of the business, of course,but the following have all been used successfully by a variety of companies: – Re-evaluating working hours – leading to greater flexibility on a weekly,monthly or annual basis – Retraining – leading to redeployment in other areas of the business – Job sharing schemes – Moves to part-time working (temporary or permanent). Cost savings herereceived a boost in the recent budget – Temporary sabbaticals or agreed leave of absence (paid or unpaid) – Early retirement, natural wastage and voluntary redundancies – Recruitment freezes (this needs careful management to ensure key positionsare covered) – Voluntary pay cuts Once again, an honest and open approach not only reduces the sometimesdevastating effect on the staff, but also pays dividends to the management andsuccess of the plans for recovery, streamlining or downsizing. Key staffmembers are far more likely to stay and weather the storm if an environment oftrust and openness is nurtured. Those in positions that are critical to thebusiness should be reassured that their positions are not, and will not be, injeopardy, as early as possible in the process. Phase 3: Selecting the jobs to be cut and notifying the individuals Having ascertained that some redundancies are inevitable, informing theworkforce first is paramount. The worst thing that can happen is for youremployees to discover they may face redundancy from rumours, outsiders or themedia, even when all the redundancies are expected to be voluntary. Having worked through phases one and two, care and attention must be givento selecting the positions and people to be made redundant. Check the currentlegislation on your consultation and notification obligations. Regardless oflegal obligations, each position deserves to be given individual consideration.Consider whether the position will be needed again in the near future, how thework will be dispersed, and what the impact will be on others in a similarposition. If you are reducing the number of people in the same or similarroles, draw up a checklist with set criteria to determine equitably whichpositions should be selected. Care and empathy is essential when notifying the individuals at risk. Evenwhen generous redundancy packages are involved, this can still be a devastatingblow and poses a real threat to the recipient’s livelihood. Look into eachindividual’s personal situation beforehand so that you have some understandingof the problems they may face. Try to get a good feel for all the pertinentproblems and issues so you can aim to provide appropriate support, eitherthrough an outplacement service or directly. Explain the process and procedurecarefully to them in person, and follow this up in a letter. It is advisable to have a short consultation period to allow the individualsat risk to put their case. However, this should not be included for cosmeticpurposes only. Consultation periods can and do work. At visual displaymanufacturer SEOS the company found itself in a position where it had to make15 people redundant. By consulting with the staff, that number was reduced to13. Personnel manager Fanny Bradbury also invited all the non-affected membersof staff to comment, and this wider consultation, while not a legal obligationas less than 20 employees were affected, paid dividends all round. “Thisproves that the consultation period does work,” says Bradbury.”Communication is the key.” Phase 4: Managing the people out Redundancy can be one of the most stressful life experiences. Those affectedare likely to be ill-equipped for positioning themselves in the job market andoften feel confused, isolated, angry and afraid. Finding another position is afull-time occupation, the complexity of which is rarely fully appreciated. Agood company will endeavour to provide support and assistance to cushion theblow and help their people to make the transition. An appropriate outplacement service is a big advantage. Studies show that anexternal outplacement service is better received and far more effective thanany in-house measures. In addition, it provides the ‘spoonful of sugar’ to helptake away the ‘bad taste’, and makes the task of imparting bad news less odiousfor the managers. A good outplacement consultant will work with the companythrough all the phases detailed above if required, providing suggestions,alternatives and pulling together a programme appropriate to the needs of theindividuals. When selecting an outplacement service, consider the following: – Location – some companies require the delegates to attend their premises,others will bring the service to you. The latter can also be housed at a nearbyconference centre if desired. – Price – an outplacement service is generally most needed when the companyfeels it can least afford it. However, price need not be prohibitive; there arewide variations and many companies have a flexible approach and will suggestviable solutions to fit your budget – but watch out for hidden costs. – Timing – the service needs to be provided at the right time for you andyour people. If you have left it a little late, don’t be fobbed off with bogusreasons as to why it would be in your interests to delay to a time which suitsthem. Try elsewhere. – Quality – the service needs to be ‘fit for purpose’. When contacting aprospective company, ask to speak with one of the consultants, not just thesales staff. They should try to understand your situation and needs rather thanpush to sell you the service. If possible, ask to see the manual. This is avaluable tool for the delegates, and a good indicator of the content andquality of the programme. Support normally continues for some time after yourcontact has ceased, so check whether this service is also provided. – People – most outplacement consultants are empathetic and experienced, butof course, there are good ones and bad. Try to speak with the consultants whowill be assigned to your organisation, by telephone or in person. Prepare a fewquestions and informally ‘interview’ them. If you cannot provide anoutplacement service, you may be able to provide some local support throughappropriate agencies and companies such as the local job centre, careersadvisers, the Citizens Advice Bureau, financial consultants, and so on. It isalso worth contacting local companies in the same business to see whether theyhave any unadvertised opportunities. Phase 5: Managing the people who remain Having provided support and assistance to those directly affected, you mustturn your attentions to those indirectly affected. In varying degrees, thisincludes all the members of the workforce. By implementing redundancies, youwill have inadvertently sown the seeds of doubt about the security of their ownpositions. Once again, good communication is essential. You need to ensure thatyour rising stars and major players do not lose face and change their focus ofattention to the job market, rather than the task in hand. Those who remain needto feel confident that the crisis is over and the company is doing all it canto avoid any further redundancies. As redundant staff leave, they often leave gaping holes. Where a friendlycolleague sat, there is now an empty desk and chair; tasks will be leftownerless; the old manager may be replaced by an unknown and more distant one.The empty void and confusion is exacerbated when senior management are hiddenaway in meetings at a time when their visibility is most critical. In your initial planning, make absolutely sure that you have includedmeasures to cover this period. Managers should spend time at the ‘coal-face’ toensure that: – Remaining staff are not overloaded with work – They understand the need for the staff cuts that have been made and feelthe situation has been managed fairly – The implementation of any time and cost-saving measures is going smoothly – The most talented staff do not feel insecure and leave – Any grievances or concerns can be aired and dealt with – Remaining staff feel visible and valued Once your head is above the water again, think about how you can show yourappreciation to the loyal staff who helped to carry the company through. Thereare a number of ways this can be achieved, but one that provides benefits allround is executive or career coaching. Offered to nominated staff, or the top10 performers, it also provides a useful incentive scheme. Managing redundancy is never easy. Managing to avoid redundancy can be evenharder. However, the adverse effects can be substantially reduced through: goodcommunication; timely intervention; careful analysis and planning; effectiveconsultation with your people; sensitivity in approach; appropriate support andassistance, and good aftercare. More than a third of the companies voted intothis year’s Sunday Times 100 Best Companies To Work For needed to makeredundancies during the past 12 months. For both companies and individuals,good redundancy management can turn a crisis into an opportunity. Sylvia Crossley is principal consultant, RMS International Comments are closed. Previous Article Next Article Five phases of good redundancy mangementOn 18 Mar 2003 in Personnel Today Related posts:No related photos.last_img read more