In this guide, Peter Vreede of Redundancy Assist provides advice to small business owners on how to successfully manage the redundancy process.
During lean economic times, directors are often forced to turn their minds to the possibility of reducing their company headcount. When the word ‘redundancy’ is mentioned disturbing emotions of anxiety can occur that can temporarily throw people off balance and lose sight of their leadership responsibilities.
To counteract these feelings, a clear Transition Plan – that addresses all the legal, stakeholder and commercial needs – should be developed.
Most people are unused to thinking about their company in a new slimmer shape as they have worked hard to develop it from small beginnings and often need help to think through the consequences of downsizing.
Besides the obvious legal requirements and adhering to a ‘fair’ process the most important element of a successful redundancy programme is regular communication with all employees.
Plan with care
Allow sufficient time to develop a Transition Plan as the process of dismissing employees due to redundancy has become much more complex and needs input and commitment from all the Board members.
False starts, misunderstandings and mistakes are difficult to rectify and can lead to unforeseen costs and disruption that can take years to get right.
Unfortunately, after badly planned redundancies many companies feel battered, reputations have been dented, Tribunal cases are outstanding, top talent has gone and the remaining employees feel uncooperative.
Worst of all, suppliers may be nervous, bank managers require reassurance and customers may move to a more ‘stable’ company; all exacerbating the original problem of cash flow and future profitability.
Keep everyone informed
During the uncertain times of a Transition Plan everyone looks to directors and managers for leadership and they need to be able to create a feeling that there is a solid plan and that it has been well explained.
People will work hard and still feel committed if the ambiguity and indecision is minimised so that the future has some hope.
It is vital to keep explaining the new company vision, why the selection criteria were chosen and how they relate to everyone. It is important that Directors are perceived to be united and available to answer questions from members of staff at all levels.
Directors I talk to know what they should do and are aware of good practice during a Transition Plan, but somehow good sense seems to desert them at this crucial stage.
Possibly embarrassment, fear or their own feelings of uncertainty seem to keep them away from influencing their employees who they most need to keep motivated. I encourage directors to be regularly seen on the floor and in offices talking to everyone.
Care and compassion are not perhaps the usual skills required in the director’s repertoire but this is an opportunity to show that consistent communication of ‘the story so far’ can be demonstrated by management from start to finish.
Repetition of the message
Organisations that come through a Transition Plan successfully are those where directors understand the legal processes, repetitively explain the details of the redundancy process and can describe the need for the new organisation structure in layman’s terms.
Different management members being available to answer questions over several weeks demonstrates leadership and often generates a large element of goodwill and re-engagement. People are more likely to buy in to what is going to happen, even if they are personally likely to leave the company.
A sure way for organizations to loose the goodwill of their people is to be perceived to be unfair or found to be dishonest. It is vital to keep explaining why the selection criteria were chosen and how they relate to everyone.
This will be endlessly discussed informally, as well as formally during the consultation process with representatives and individuals. Everyone will be watching and there is only one opportunity to get the process of reorganisation and dismissing employees right.
Looking to the future
As the time arrives for employees to leave, directors may be tempted to delegate the exit process to “people who know how to sort out the admin’.” However, a few warm words with a personal handshake in the preceding days by a senior member of staff and a letter of thanks from the MD will take much of the sting out of the leaving.
Remaining employees will also appreciate such gestures of goodwill and can help them to engage with the new reality and create a new certainty and vision.
It may take many meetings and different communication methods to get across a clear vision of the future.
A robust redundancy programme can re-invigorate an organisation. However, this is usually unfamiliar country but help is available from Redundancy Assist to ensure the costs, legal, fair process, negotiations, employee relations, PR and settling the new organisation are all handled with experience and care.
When the dust has settled a company can be more robust, more flexible and with re-energised employees. This is a tall order but can be achieved with visible and energetic leadership utilizing every means of listening and discussion.
Peter Vreede, Principal of Redundancy Assist, specialises in creating leaner and stronger organisations through careful planning and wide experience in people management, focusing on re-organisation and redundancy.