The sad fact is that your organisation may have little choice at the moment but to reduce workforce numbers. But when making redundancies you should always take the time to plan and implement the changes. Avoiding the mistakes made by high profile companies will help to limit potential damage to your organisation, exiting employees and remaining workforce.
Costly mistakes when making redundancies
No matter how much you care about your team and want to look after them, if times are tight, you must reduce your business costs. Otherwise the whole organisation will go under and put your entire staff out of a job.
However, a poorly managed restructure can be cost your organisation by:
- Impacting your remaining workforce’s morale and causing your top talent to jump ship.
- Damaging your corporate reputation and brand.
- Preventing your exiting employees from leaving with dignity and respect.
Ultimately this could limit the company’s capacity to respond to an upturn.
Suppliers, bank managers and customers may question doing business with you and move to a more ‘stable’ company, further impacting cash flow and future profitability.
Here are our five top tips for what NOT to do when managing a redundancy process.
1. Forgetting to plan
Allow sufficient time to develop and implement a transition plan. Hasty and poorly executed redundancies can damage an organisation’s reputation and result in legal issues.
Our free resource The Redundancy Checklist provides an in-depth guide to planning and implementing retrenchments.
2. Cutting with a hatchet
If you downsize in haste or indiscriminately you are likely to harm the organisation’s brand. It may also limit the organisation’s capacity to respond to an economic upturn.
Remain objective when selecting which roles to make redundant. Use fair selection criteria to work out general performance and what each individual brings to the business when deciding who to make redundant. Choosing candidates for the wrong reasons may expose your organisation to claims of discrimination, unfair dismissal or dismissal for a prohibited reason. Make decisions based on individual skills and future business requirements.
3. Turning it into a long process
Try to make restructuring a one-time event, rather than a series of painful cuts.
Then you should reassure the remaining employees their jobs are secure. This can help you minimise the risk of ‘survivor syndrome’ and support staff in moving forward from the redundancies.
4. Making redundancies before the weekend or holidays
Redundancies should occur early in the week. Avoid holding redundancy notification meetings on a Friday or the day before a holiday when it is harder for employees to adjust to the news and give them time to brood. Conveying the news earlier in the week means people can use work days to go to outplacement sessions and start job searching.
5. Keeping employees in the dark
Whether you have five or 100 employees it is important to keep them informed at each step of the way. This will help them to come to terms with and understand the situation.
Remember that redundancy affects a whole workforce. Get the remaining team together and deliver clear communication about the process.
Ensure your organisation’s redundancy process is strategic and above board.