Three stages of a successful redundancy process

3 stages of successful redundancy process

Organisational restructures involve more than just deciding to make redundancies. Companies also need to comply with relevant legislation, manage employee transition and develop and implement a communication strategy to maintain workplace morale and retain corporate reputation. This process can be difficult to manage. Glide Outplacement’s comprehensive strategy for a successful redundancy process can guide you through each stage.

The risks of a badly-managed redundancy process

Getting the redundancy process wrong can result in disastrous consequences. In doing so, organisations:

  • Open themselves up to exposure to expensive legal actions.
  • Risk causing affected employees unnecessary distress
  • Potentially damage the remaining workforce’s morale (which encourages top talent to leave).
  • Limit their capacity to respond to an upturn.

A well-planned restructuring process typically will involve three stages:

1. Pre-redundancy consultation

During difficult times, you should attempt to be transparent about what’s going on. Consider consulting and holding workshops with staff. Employees often have ideas on cutting costs and creating new revenue streams that managers might not have identified, and redundancies could be unnecessary.

Share with employees the need to cut costs at an early stage, explain why it is necessary, and advise that their input will be heard and valued.

If, despite their input, restructuring can’t be avoided, employees are more likely to appreciate your position because they will know you have explored all other avenues. By involving them, you may have minimised backlash to the decision.

When determining the individuals to be made redundant, picture the shape of the organisation post-downsizing. Work out which employees and roles are critical for its future viability. Ensure you use fair and comprehensive selection criteria to identify which employees to make redundant and which roles to keep, reducing the risk of future legal challenges,

When restructuring an organisation, it is critical you identify non-essential positions, retain and motivate your high-performers and ensure remaining talent and experience are not lost. These considerations are key to ensuring a successful redundancy process.

2. Transition

Telling staff they’re being made redundant is a difficult task. It can also be devastating for the person being retrenched. With forward planning and care, you can ensure redundancy notifications are handled correctly.

Will you provide access to outplacement services? Some employers prefer not to assist former employees. This may be due to a desire to pretend redundancies haven’t happened or concerns about potential costs.

However, offering outplacement support is a worthwhile investment. Former employees can receive:

  • Career transition counselling.
  • Assistance with resume preparation.
  • Advice on the hidden job market.
  • Networking training.

Research has shown that employees who receive outplacement assistance find a new role more quickly than people who are unsupported. They are also less likely to take legal action against their former company or to criticise it publicly.

When organisations treat exiting employees with compassion and respect, they also reduce the risk of alienating or losing talent in the remaining workforce. They can also protect their corporate brand and employer reputation.

3. Post-redundancy

Following redundancies, monitor remaining employees for their reactions to the job losses. ‘Survivor syndrome’ describes the physical and psychological impact of redundancies on the remaining staff who didn’t lose their jobs.

Even though their job is ‘safe’, staff who remain after redundancies are often affected by the process. They can suffer from feelings typically experienced by people who survive major disasters or traumas. When stress levels are raised,  staff morale, motivation and productivity can decrease. It can also be difficult for individuals to move forward.

Address any issues that arise using workshops, online surveys, focus groups or individual coaching. By managing staff concerns proactively, you can head off their underlying concerns. Consider asking their opinions on the organisation’s future.

Strategic redundancies

The Redundancy Checklist – a guide for HR managers and employers is a good practice guide for making redundancies. It recommends a series of steps to ensure the process is carefully and efficiently managed. Some of the key things to address are legal and industrial requirements such as whether you need to consult with unions, retrenchment entitlements and final payments.

Reduce the risks

Glide Outplacement can develop a cost-effective restructuring program to transition employees from your organisation, reducing the risks associated with change.

Working with you to plan the restructuring process, we can advise on strategy and programs and deliver executive training to achieve positive outcomes from start to finish. Our services will help you engage employees in transition activities while treating them with dignity and respect.

Our communication experts can assist with sending out a positive corporate message about your downsizing event, to retain your brand equity and reputation as an employer of choice. We also provide solutions to productivity challenges brought on by change, supporting employees and managers to come to terms with their changing workplace.