3 stage successful redundancy process

Organisational restructures involve more than just deciding to make redundancies. Companies need to comply with relevant legislation, manage employee transitions and develop and implement a communication strategy that maintains workplace morale and protects the corporate reputation. Navigating the redundancy process can be challenging and stressful for all parties involved. However, when executed thoughtfully, it can help the organisation emerge stronger and more resilient.

Glide Outplacement Australia has developed a comprehensive strategy to guide businesses through each stage of the redundancy process. This structured approach ensures compliance while prioritising the wellbeing of both exiting and remaining employees.

The risks of a badly-managed redundancy process

A poorly managed redundancy process can have severe consequences, not just for the departing employees but for the organisation as a whole. Here are some risks that can arise when the process isn’t handled carefully:

1. Legal repercussions: Failure to comply with redundancy laws or to consult employees properly can expose the organisation to costly legal actions, including unfair dismissal claims.

2. Emotional distress: Mishandling redundancies can cause unnecessary stress and anxiety for the employees who are being let go. A lack of empathy or clear communication during this time can exacerbate negative emotions.

3. Impact on morale: The remaining workforce is often overlooked during a redundancy process. ‘Survivor syndrome’ can lead to lower morale, reduced motivation and higher turnover as employees feel insecure or disengaged.

4. Damage to corporate reputation: A business’s reputation as a responsible employer can be damaged if people perceive the redundancy process as unfair or poorly executed. This affects not only current employees but also future talent recruitment efforts, which could limit their capacity to respond to an upturn.

In contrast, a well-planned and executed redundancy process can reduce these risks and lead to positive outcomes. A successful process generally involves three key stages: pre-redundancy consultation, transition and post-redundancy management.

Stage 1: Pre-redundancy transparency and consultation

Before any formal decisions are made about redundancies, you should aim to be transparent about what’s going on. Consider engaging in an inclusive communication and consultation process with staff. This serves several important functions, from gathering input to preparing the workforce for potential changes.

Involving employees early on and being transparent about the organisation’s situation can reduce resistance to the restructuring process. Open discussions about the challenges the business is facing, such as financial difficulties or the need for efficiency improvements, help foster trust and understanding. Advise that their input will be heard and valued.

Employees may also have insights about cost-saving measures or untapped revenue opportunities that management have not considered. In some cases, these suggestions could lead to alternatives that prevent the need for redundancies altogether.

Even 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. Involving them may help minimise backlash to the decision.

If redundancies are necessary, plan the future shape of the organisation post-downsizing. Determine which roles are critical for the business’s future viability and long-term success. Use objective and fair selection criteria to evaluate which positions are essential for the company to remain competitive and which could be made redundant without compromising future operations. This will reduce 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.

Stage 2: Transition

Once redundancies are confirmed, telling staff their role is being made redundant is a difficult task. This is often an emotionally charged phase but with forward planning and care, you can ensure redundancy notifications are handled correctly.

Communicating the decision

Breaking the news to an employee that their role is being made redundant is never easy. However, having a clear communication plan in place can make the process more respectful and less distressing. Some steps to consider include:

Prepare a clear redundancy notification script. This should include the reasons for the redundancy, how the decision was made and the next steps for the employee.
Be compassionate. Redundancies are a business decision, but they impact individuals on a personal level. Approach the conversation with empathy and provide employees with the information they need to transition quickly and easily.

Offering outplacement services

Will you offer the employees access to outplacement services? Outplacement services are a worthwhile investment that can provide significant benefits for both the employee and the organisation. These services can include:

Career counselling to help individuals navigate their next steps with professional guidance and support their career transition.

Resume writing and job search support. Specialist resume writers and career coaches can assist with resumes, job applications and interview skills so that employees get back on their feet quickly.

Networking advice, with training on how to tap into the hidden job market and expand professional networks. This gives former employees a better chance of finding new opportunities.

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.

By investing in outplacement services and treating their employees with compassion and respect, organisations show they care about their departing employees’ wellbeing. This can reduce the risk of negative public perception. Additionally, it reassures remaining employees and stakeholders that the company is handling the situation responsibly.

Stage 3. Post-redundancy

The work isn’t over once the redundancies are announced. The post-redundancy phase is critical for maintaining productivity, rebuilding morale and ensuring the long-term success of the organisation.

Managing ‘survivor syndrome’

Survivor syndrome refers to the impact of redundancies on the remaining staff. 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.

To mitigate these effects, acknowledge the emotional impact of the redundancies. Reassure employees that their positions are secure and that the redundancies were a necessary part of the business’s survival strategy. Provide employees with support and resources such as counselling, workshops or coaching to help them process the change and refocus on their work. Address any issues that arise and proactively manage their concerns.

Rebuilding a cohesive and motivated team after redundancies can be challenging, but it’s essential for future success. Consider holding team-building activities or strategic planning sessions that allow remaining employees to contribute to the company’s future direction.

A well-managed redundancy process

A well-managed redundancy process ensures compliance with legal obligations while protecting the emotional and professional wellbeing of both departing and remaining employees. Engaging in transparent consultation, offering meaningful support during the transition phase and addressing the needs of the remaining workforce post-redundancy process can reduce risks and help companies emerge stronger.

At Glide Outplacement Australia, we specialise in developing tailored outplacement programs to support your employees’ career transitions and reduce the risks associated with organisational change.

Working with you to plan a future-focused redundancy process, we can advise on strategy and programs and deliver notification training to achieve positive outcomes from start to finish. We can help your organisation navigate change with confidence and care.

Our communication experts can assist with sending out positive corporate messages 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.