How to Handle Redundancy Well and Engage Employees
Energise provide bespoke programs to unlock people potential and help
people to change career and work better. Rachel Brushfield, Director at
Energise, specialises in career reinvention and helps you to market
yourself and create a career strategy and plan to succeed and keep
nimble in our changing world. Energise also do talent management and
human capital projects so are up to date with work trends and what
employers are seeking. Clients include individuals from GAM, RBOS,
Merrill Lynch, Accenture, Mellon, law firms such as Clifford Chance and
one of Rachel’s clients, Duncan Goose won an ITV 2007 People of Briton
Award.
“When the winds of change blow, some people build windmills, others build walls.” Anonymous
“When we long for life without difficulties, remind us that oaks grow strong in contrary winds and diamonds are made under pressure.” Peter Marshall
“Only in growth, reform and change, paradoxically enough, is true security to be found.” Anne Morrow Lindberg
The world of work is going through unprecedented change. The credit crunch has forced redundancies in many sectors, some of which have never seen anything like it. The City has born the brunt of it and the legal profession has also seen redundancies for the first time as a knock-on effect.
Navigating soundly through these changes is critical to not only survive but also thrive with a firm yet gentle hand on the tiller.
This article will explore how redundancy can be managed well and what needs to be done after a restructure to maintain morale and the high performance needed to succeed. One positive thing about the changes taking place is that it is an opportunity to improve communication and policies which otherwise might have continued for decades.
One in four companies have implemented a pay freeze, and for a hard working and high financial reward profession, this can affect morale and motivation.
Internal communication in many companies is often neglected and not thought of as a priority. It is always a priority because it creates engagement and engagement is crucial to productivity with productivity creating profit. During and after restructures, it becomes even more important. A survey by Gensler shows that higher performing companies spend more time collaborating with employees, learning and having social contact in the workplace.
Redundancy is an emotional time for companies, for the people leaving and the people staying. Human beings need to be listened to and heard and this is especially true when they feel insecure or unsure.
To be let go in an uncertain work climate is scary and difficult for all, especially where job prospects are poor. Often when people don’t know what to say, they don’t say anything, which is the worst possible thing to do, because this can be interpreted as a lack of care.
It is extremely expensive to hire and train a new member of staff. Looking at deployment or job share can be a way of preventing redundancies and improving work life balance.
It is imperative to communicate clearly what is happening and when, remembering that when people are stressed, they are likely to find it harder to take in and retain information. Plan the timing of restructures so that people being made redundant and the survivors know what is happening when. Make sure that the briefings are consistent and use a script which has been piloted first and remember that how people are treated indicates management attitudes, which will be remembered long after the redundancies. Thinking through when, where and how people are communicated with and the different potential reactions to receiving the news can make all the difference. Give support and training to the people responsible for communicating redundancies – HR and line managers. People being made redundant go through the natural stages of bereavement; anger, isolation, grief, loss and acceptance with different people taking less or more time to recover.
People should be treated with respect and dignity. I have heard horror stories of people with no questions over their performance for 4 years being called in and told to leave without any financial settlement. Not only is this unlawful, it is inhumane. This behaviour will irrefutably damage your company’s reputation, and Generation Y choose an employer on the basis of its values and corporate social responsibility. The Internet enables communication, true or untrue to be disseminated at the speed of light.
Be fair and lawful in redundancies – there is a clear process to follow and individuals must be selected by objective not subjective means. These criteria should be open to scrutiny in a court of law should they ever be questioned. If necessary, as many Human Resources professionals have never dealt with redundancies in a law firm, use a consultant to advise on doing it right. Give line managers support and training about how to have difficult conversations with their direct reports.
Provide outplacement support for people leaving. Many people in my experience often don’t enjoy marketing themselves and benefit from support to think about what next at the forced career crossroads that redundancy causes. This is especially important for shrinking areas of work where people simply cannot get another job for the foreseeable future.
“Survivors syndrome” that results from a company making redundancies goes through 4 clear stages: 1) relief about still having a job, 2) guilt about still having a job, when others lost theirs, 3) envy about the settlement that departing employees got and 4) resentment about having to do more work for no more money and that the company got to the position where it had to make redundancies. Stress also increases which has a negative impact on productivity and performance, just when companies need employees to raise their game. Give people time to adjust and reflect and invest time and training in them to show that that are an important part of the future and the company.
How people feel affects what they do. This simple fact is obvious and yet many companies are not especially good at emotional intelligence and the soft skills necessary to engage employees. People need to feel safe and secure to be creative and innovative and think about new solutions to old problems. New approaches are going to help companies evolve, so creating a safe, secure and open culture is time and money well spent. Bright professionals can be very sharp in their communication style, which can crush embryonic ideas and enthusiasm, especially amongst younger and less confident employees. Learning and innovation only occurs when employees trust the intentions of others, and redundancies especially if handled badly destroy trust. Trust needs to be created for employees to have the confidence to submit their views and suggestions.
The ‘psychological contract’ is the unspoken contract that exists between the employer and its employees and affects discretionary effort given by the employee in exchange for them perceiving that they are being treated well/fairly and that trust is present. This contract can be seriously and irreparably damaged if restructures are badly handled and communication poor during/following redundancy. Employees’ contribution in companies can no longer be extracted by shame, guilt and fear. A pull not push strategy is required to release discretionary effort and employees hold the invisible purse strings.
Challenging times can create tension, especially amongst bright competitive individuals under pressure, and these tensions can be picked up by employees, so it is important for the Board to be aware of their impact on motivation and engagement and show a united front.
Creating a confidential forum for the survivors to express how they feel, talk about their fears and ask any questions will help to reduce uncertainty. Without this, their minds will be having internal conversations, e.g. are more redundancies likely which will inhibit their focus and productivity. Ask them for feedback and ideas and help them align their personal goals and motivation with the company.
The CEO should share a clear vision for the company and show clear leadership and humility. The Board need to be especially visible and accessible to employees at this time. Sharing objectives and explaining why they were chosen helps employees understand how they fit into the company’s direction and future.
Consult employees about any decisions, explaining why things are happening and what options were considered. Generation Y like being consulted which is very different from the past. Carefully evaluate the long-term impact of money saving decisions. Many companies in the last few months to save budgets have cut entertainment budgets. One company informed employees via e mail that client entertainment budgets were being cut and they could no longer buy associates lunch, for example. Employees were neither consulted nor warned about the decision. Consider the impact on motivation for employees already working an excessive number of hours.
Companies can put long-term success at risk by focusing on the short term. According to the Boston Consulting Group and EAPM survey, 57% of companies are planning cuts in the UK. Also, 33% are cutting back on individual training and 54% on company events, despite the fact that these were shown not to work well in the last recession.
Show appreciation and give employees support. Budgets may be limited for pay rises and learning and development but often support costs little if anything. Saying ‘thank you’, celebrating successes, rewarding thoughtfulness in cross referral, introducing an internal mentoring scheme all help to engage employees, especially after restructure. Invest in the employee experience. Talent often play a waiting game after redundancy and move when the market picks up so invest in them, find out what motivates them and give them new challenges to get their teeth into. An action learning set with representatives from different departments sharing challenges can be a great way to do this. Use a restructure as an opportunity to create positive change e.g. by reviewing the employee value proposition and redesigning work to play to people’s strengths and their values
Towers Perrin Global Workforce study 2008 showed that only 21% of people are fully engaged in their work. Sincere senior management interest in employee well-being has been shown to be a powerful influence on employee engagement. Asking employees about their under-utilised skills and motivations is a simple thing that can be done to engage employees, and yet rarely does this happen.
According to Mckinsey Quarterly, values and culture is the no 1 factor to motivate talent when considering an employer; this is also likely to be a critical factor for engagement once employed.
Line management are many employees’ experience of the employer brand, and therefore not investing in their soft skills, ability to have difficult conversations, use a coaching style of management and emotional intelligence is a shortcut with a likely long term consequence. Employees need to feel that line managers listen to and act on their views. Receiving praise and recognition, feeling that their opinions count, receiving opportunities to learn and grow and making time for progress/career conversations are all engagement factors.
Failure to manage redundancy fairly and with clear communication will result in the loss of trust and when trust is gone, it is hard to regain. The discretionary effort from employees, so important in normal times is even more vital with fewer employees doing more work. The employer brand and reputation of your brand will be damaged and not only will talented employees leave, word of mouth will make it harder to attract the new talent crucial to future company growth.
Tips to successfully navigate the downturn
Enforced change, caused by restructures can be a positive catalyst to revaluate and improve how things are done. It is easy to think short term, cut budgets and get heads down with line managers believing their employees should be lucky to have a job. The wise companies will invest for long term success, creating engagement and harnessing the discretionary effort of their employees, ensuring they don’t jump ship when things improve.
Recession doesn’t have to result in reduced engagement. Engagement can rise if employees see that it is tough on the outside and there is a strong sense of unity and connection inside the company. Indeed, make employee engagement an ongoing priority and sustained initiative.
Ultimately maximising success is about tapping into the discretionary effort given by employees because they feel motivated, supported and clear about what they are doing and why. Soft factors create hard measures such as profit and employee retention.
The real focus for a company’s strategy is now how to get the best return for employees’ energies, knowledge and creativity. Human capital creates financial capital, about which there is nothing soft and fluffy, and therein lies the unlocked potential to growth and recovery.
“Only in growth, reform and change, paradoxically enough, is true security to be found.” Anne Morrow Lindberg
The world of work is going through unprecedented change. The credit crunch has forced redundancies in many sectors, some of which have never seen anything like it. The City has born the brunt of it and the legal profession has also seen redundancies for the first time as a knock-on effect.
Navigating soundly through these changes is critical to not only survive but also thrive with a firm yet gentle hand on the tiller.
This article will explore how redundancy can be managed well and what needs to be done after a restructure to maintain morale and the high performance needed to succeed. One positive thing about the changes taking place is that it is an opportunity to improve communication and policies which otherwise might have continued for decades.
One in four companies have implemented a pay freeze, and for a hard working and high financial reward profession, this can affect morale and motivation.
Internal communication in many companies is often neglected and not thought of as a priority. It is always a priority because it creates engagement and engagement is crucial to productivity with productivity creating profit. During and after restructures, it becomes even more important. A survey by Gensler shows that higher performing companies spend more time collaborating with employees, learning and having social contact in the workplace.
Redundancy is an emotional time for companies, for the people leaving and the people staying. Human beings need to be listened to and heard and this is especially true when they feel insecure or unsure.
To be let go in an uncertain work climate is scary and difficult for all, especially where job prospects are poor. Often when people don’t know what to say, they don’t say anything, which is the worst possible thing to do, because this can be interpreted as a lack of care.
It is extremely expensive to hire and train a new member of staff. Looking at deployment or job share can be a way of preventing redundancies and improving work life balance.
It is imperative to communicate clearly what is happening and when, remembering that when people are stressed, they are likely to find it harder to take in and retain information. Plan the timing of restructures so that people being made redundant and the survivors know what is happening when. Make sure that the briefings are consistent and use a script which has been piloted first and remember that how people are treated indicates management attitudes, which will be remembered long after the redundancies. Thinking through when, where and how people are communicated with and the different potential reactions to receiving the news can make all the difference. Give support and training to the people responsible for communicating redundancies – HR and line managers. People being made redundant go through the natural stages of bereavement; anger, isolation, grief, loss and acceptance with different people taking less or more time to recover.
People should be treated with respect and dignity. I have heard horror stories of people with no questions over their performance for 4 years being called in and told to leave without any financial settlement. Not only is this unlawful, it is inhumane. This behaviour will irrefutably damage your company’s reputation, and Generation Y choose an employer on the basis of its values and corporate social responsibility. The Internet enables communication, true or untrue to be disseminated at the speed of light.
Be fair and lawful in redundancies – there is a clear process to follow and individuals must be selected by objective not subjective means. These criteria should be open to scrutiny in a court of law should they ever be questioned. If necessary, as many Human Resources professionals have never dealt with redundancies in a law firm, use a consultant to advise on doing it right. Give line managers support and training about how to have difficult conversations with their direct reports.
Provide outplacement support for people leaving. Many people in my experience often don’t enjoy marketing themselves and benefit from support to think about what next at the forced career crossroads that redundancy causes. This is especially important for shrinking areas of work where people simply cannot get another job for the foreseeable future.
“Survivors syndrome” that results from a company making redundancies goes through 4 clear stages: 1) relief about still having a job, 2) guilt about still having a job, when others lost theirs, 3) envy about the settlement that departing employees got and 4) resentment about having to do more work for no more money and that the company got to the position where it had to make redundancies. Stress also increases which has a negative impact on productivity and performance, just when companies need employees to raise their game. Give people time to adjust and reflect and invest time and training in them to show that that are an important part of the future and the company.
How people feel affects what they do. This simple fact is obvious and yet many companies are not especially good at emotional intelligence and the soft skills necessary to engage employees. People need to feel safe and secure to be creative and innovative and think about new solutions to old problems. New approaches are going to help companies evolve, so creating a safe, secure and open culture is time and money well spent. Bright professionals can be very sharp in their communication style, which can crush embryonic ideas and enthusiasm, especially amongst younger and less confident employees. Learning and innovation only occurs when employees trust the intentions of others, and redundancies especially if handled badly destroy trust. Trust needs to be created for employees to have the confidence to submit their views and suggestions.
The ‘psychological contract’ is the unspoken contract that exists between the employer and its employees and affects discretionary effort given by the employee in exchange for them perceiving that they are being treated well/fairly and that trust is present. This contract can be seriously and irreparably damaged if restructures are badly handled and communication poor during/following redundancy. Employees’ contribution in companies can no longer be extracted by shame, guilt and fear. A pull not push strategy is required to release discretionary effort and employees hold the invisible purse strings.
Challenging times can create tension, especially amongst bright competitive individuals under pressure, and these tensions can be picked up by employees, so it is important for the Board to be aware of their impact on motivation and engagement and show a united front.
Creating a confidential forum for the survivors to express how they feel, talk about their fears and ask any questions will help to reduce uncertainty. Without this, their minds will be having internal conversations, e.g. are more redundancies likely which will inhibit their focus and productivity. Ask them for feedback and ideas and help them align their personal goals and motivation with the company.
The CEO should share a clear vision for the company and show clear leadership and humility. The Board need to be especially visible and accessible to employees at this time. Sharing objectives and explaining why they were chosen helps employees understand how they fit into the company’s direction and future.
Consult employees about any decisions, explaining why things are happening and what options were considered. Generation Y like being consulted which is very different from the past. Carefully evaluate the long-term impact of money saving decisions. Many companies in the last few months to save budgets have cut entertainment budgets. One company informed employees via e mail that client entertainment budgets were being cut and they could no longer buy associates lunch, for example. Employees were neither consulted nor warned about the decision. Consider the impact on motivation for employees already working an excessive number of hours.
Companies can put long-term success at risk by focusing on the short term. According to the Boston Consulting Group and EAPM survey, 57% of companies are planning cuts in the UK. Also, 33% are cutting back on individual training and 54% on company events, despite the fact that these were shown not to work well in the last recession.
Show appreciation and give employees support. Budgets may be limited for pay rises and learning and development but often support costs little if anything. Saying ‘thank you’, celebrating successes, rewarding thoughtfulness in cross referral, introducing an internal mentoring scheme all help to engage employees, especially after restructure. Invest in the employee experience. Talent often play a waiting game after redundancy and move when the market picks up so invest in them, find out what motivates them and give them new challenges to get their teeth into. An action learning set with representatives from different departments sharing challenges can be a great way to do this. Use a restructure as an opportunity to create positive change e.g. by reviewing the employee value proposition and redesigning work to play to people’s strengths and their values
Towers Perrin Global Workforce study 2008 showed that only 21% of people are fully engaged in their work. Sincere senior management interest in employee well-being has been shown to be a powerful influence on employee engagement. Asking employees about their under-utilised skills and motivations is a simple thing that can be done to engage employees, and yet rarely does this happen.
According to Mckinsey Quarterly, values and culture is the no 1 factor to motivate talent when considering an employer; this is also likely to be a critical factor for engagement once employed.
Line management are many employees’ experience of the employer brand, and therefore not investing in their soft skills, ability to have difficult conversations, use a coaching style of management and emotional intelligence is a shortcut with a likely long term consequence. Employees need to feel that line managers listen to and act on their views. Receiving praise and recognition, feeling that their opinions count, receiving opportunities to learn and grow and making time for progress/career conversations are all engagement factors.
Failure to manage redundancy fairly and with clear communication will result in the loss of trust and when trust is gone, it is hard to regain. The discretionary effort from employees, so important in normal times is even more vital with fewer employees doing more work. The employer brand and reputation of your brand will be damaged and not only will talented employees leave, word of mouth will make it harder to attract the new talent crucial to future company growth.
Tips to successfully navigate the downturn
- Define a clear vision for the company
- Create clear motivating individual objectives from financial targets
- Provide support – outplacement for existing employees and create a forum for survivors to express how they feel and generate ideas
- Define your employer brand, values and behaviours
- Revaluate your talent criteria and invest in the employee experience
- Consider introducing smart/flexible working to help employees manage stress levels and improve work life balance
- Involve employees in decision-making and communicate, communicate and keep communicating.
- Look at how the environment in which people work can be made more inspiring
- Encourage people to have time to think and share ideas
- Show appreciation and say thank you
- Give line managers training to improve their soft skills, including how to have difficult conversations
- Create social occasions where survivors can connect and have opportunities for internal networking
- Do an employee attitude survey and some focus groups to gauge feelings and issues to address
- Appoint Continuous improvement advocates to promote proactive positive change and tap into the innate wisdom and creativity of the employees
- Model companies advanced in forward thinking practices e.g. The Times best companies to work for list
- Discuss the different needs and expectations across the generations
- Create career conversations – don’t put off even if there are limited opportunities for promotion
- Create an open, open minded high trust culture
- Maintain corporate social responsibility and encourage your employees to have time to help charities/do what they feel passionately about
- Support people in developing emotional resilience and how to manage stress
- Support employees to focus on their core strengths and what motivates them
- Create internal coaches to provide a confidential sounding board and support growth, learning and change
- Create an alumni – previous employees can be the source of future employees and could themselves be reemployed when the market picks up, saving recruitment fees
- Invest time in engaging saboteurs and objectors as they can sway opinion in a negative way
- Create Engagement champions, people who are adaptable, passionate about work, positive, self aware and emotionally intelligent and achievement oriented
Enforced change, caused by restructures can be a positive catalyst to revaluate and improve how things are done. It is easy to think short term, cut budgets and get heads down with line managers believing their employees should be lucky to have a job. The wise companies will invest for long term success, creating engagement and harnessing the discretionary effort of their employees, ensuring they don’t jump ship when things improve.
Recession doesn’t have to result in reduced engagement. Engagement can rise if employees see that it is tough on the outside and there is a strong sense of unity and connection inside the company. Indeed, make employee engagement an ongoing priority and sustained initiative.
Ultimately maximising success is about tapping into the discretionary effort given by employees because they feel motivated, supported and clear about what they are doing and why. Soft factors create hard measures such as profit and employee retention.
The real focus for a company’s strategy is now how to get the best return for employees’ energies, knowledge and creativity. Human capital creates financial capital, about which there is nothing soft and fluffy, and therein lies the unlocked potential to growth and recovery.
