Key Considerations of Redundancy
The recent major job losses at Rover and Littlewoods, combined with sagging consumer and business confidence in the economy, are raising fears that redundancy is to become a common trend in 2005. Uncertain times lie ahead for all types and sizes of businesses, which underlines the importance for companies to have robust HR management strategies.
An announcement of redundancy always has a negative impact on morale and productivity. It is therefore imperative that companies handle the resulting impact in a sensitive and professional manner so that they do not lose the goodwill and motivation of the remaining staff.
There are three key points that need to be considered in order to effectively overcome the potential negative effect of redundancy :
- Identify your talented staff early so you know who you want to retain - you know who are your organisation’s strongest assets
- Actively seek out redeployment opportunities – make sure recruitment staff are suitably incentivised
- Establish outplacement provision to help departing staff move forward quickly.
Spot talent early
Redundancy can cause talented people to ‘jump ship’ at the thought of uncertain and unstable times ahead. During a redundancy period it is more vital than ever for a company to retain its most valuable employees and not lose them to competitors. Losing workers due to poor talent management causes severe instability to a business, especially when the organisation is also losing workers through choice.
So how can businesses avoid adding to the injury of redundancy? Companies need to spot talent early - talented workers are 25 per cent more productive than average employees, and it is vital that these individuals are retained. HR departments need to look out for early signs of talent throughout their workforce, and a broad perspective needs to be taken when considering who is talented. Key questions such as ‘Are unproductive employees necessarily untalented – or could boredom, poor management and lack of a challenge, be concealing their latent talent?’ should be addressed.
If talented employers do not receive career support especially in times of crisis, they will go elsewhere to pursue their goals. A structured talent management strategy is paramount in uncertain times. It ensures skills development and progression are actively supported, and reassures talented employees that their career is still being looked after and will not be affected.
There are six steps to ensuring that talented staff are retained by your business:
- Recognise that talent that can be found at all levels within an organisation
- Understand the reasons for talent leaving
- Engage with top talent, which tends to be attracted by retention drivers such as mentoring, coaching, training programmes and particularly by discussion groups where the top talent is asked to contribute to the company’s vision, direction and future
- Provide feedback and stimulation
- Recognise that managers have the greatest influence over retaining top talent
- Assume that when notice is given that they are not out of the door until it is firmly closed behind them
Offer employees career opportunities
Redundancy can be the most traumatic experience of a person’s career and how ex-employees are handled can strongly influence the reputation of a company. Organisations need to be aware of their reputation as an Employer of Choice – one that does the right thing by their employees. Businesses have to concede that the way they treat departing employees can strongly impact on the way their company is perceived – by current and prospective workers. Often, not enough is made of redeployment opportunities and talented, loyal staff will walk out of the door who could easily be redeployed leaving a costly recruitment necessity in another part of the organisation. We have all heard stories of the person who was made redundant only to be re-employed on a contractual basis.Being considered for redeployment can also help to alleviate the feelings of personal rejection and drives home the message that it is jobs that are restructured not individuals.
"One big mistake that organisations make at redundancy time is to act as if these people are leaving the marketplace. They’re not; they go to work for your competitors or clients and how you handled making them redundant affects their views of your organisation," says Mike Petrook of the Chartered Institute of Management.
Establish outplacement schemes
Outplacement strategies employed by businesses should be unique to their needs. For example in the Summer of 2001 Prudential UK faced a major challenge. The new business strategy to ensure ongoing success would necessitate a radical restructuring and downsizing exercise over the subsequent two-to-three year period. This would potentially affect up to 20 per cent of its total employee population in the UK – around 2,000 staff.
The Prudential’s HR team, however, felt strongly that the traditional models involving compulsory redundancies and outplacement would be inapproporiate and expensive and that a more radical and holistic model of career management for both the leavers and the stayers affected by the changes would produce the best results both for the business and its people.
So Pru Careerlink was born in the Autumn of 2001 under the leadership of Stephen Young, Prudential’s Transition Manager. The plan was for all services to be delivered seamlessly under an internal brand that encompassed redeployment, career management and outplacement for those impacted. Essentially, the key drivers for developing a new internal brand for career management during this major change programme were to:
Redundancy can be the most traumatic experience of a person’s career and how ex-employees are handled can strongly influence the reputation of a company. Organisations need to be aware of their reputation as an Employer of Choice – one that does the right thing by their employees. Businesses have to concede that the way they treat departing employees can strongly impact on the way their company is perceived – by current and prospective workers. Often, not enough is made of redeployment opportunities and talented, loyal staff will walk out of the door who could easily be redeployed leaving a costly recruitment necessity in another part of the organisation. We have all heard stories of the person who was made redundant only to be re-employed on a contractual basis.Being considered for redeployment can also help to alleviate the feelings of personal rejection and drives home the message that it is jobs that are restructured not individuals.
"One big mistake that organisations make at redundancy time is to act as if these people are leaving the marketplace. They’re not; they go to work for your competitors or clients and how you handled making them redundant affects their views of your organisation," says Mike Petrook of the Chartered Institute of Management.
Establish outplacement schemes
Outplacement strategies employed by businesses should be unique to their needs. For example in the Summer of 2001 Prudential UK faced a major challenge. The new business strategy to ensure ongoing success would necessitate a radical restructuring and downsizing exercise over the subsequent two-to-three year period. This would potentially affect up to 20 per cent of its total employee population in the UK – around 2,000 staff.
The Prudential’s HR team, however, felt strongly that the traditional models involving compulsory redundancies and outplacement would be inapproporiate and expensive and that a more radical and holistic model of career management for both the leavers and the stayers affected by the changes would produce the best results both for the business and its people.
So Pru Careerlink was born in the Autumn of 2001 under the leadership of Stephen Young, Prudential’s Transition Manager. The plan was for all services to be delivered seamlessly under an internal brand that encompassed redeployment, career management and outplacement for those impacted. Essentially, the key drivers for developing a new internal brand for career management during this major change programme were to:
- Develop Prudential’s reputation as an employer of choice
- Positively influence the changing psychological contract
- Maximise the internal redeployment of skills and knowledge
- Deliver these key outcomes cost effectively and professionally
In summary
A detailed and robust HR Management strategy will ensure that in times of crisis your business can smoothly overcome major traumas and end up as a more effective and efficient organisation. The essential and most talented staff within your business will be spotted and their careers managed, ensuring that a greater level will be retained. Those staff that unfortunately have to be released, will be looked after and supported, ensuring their wellbeing and your reputation will be enhanced as an employer of choice.
A detailed and robust HR Management strategy will ensure that in times of crisis your business can smoothly overcome major traumas and end up as a more effective and efficient organisation. The essential and most talented staff within your business will be spotted and their careers managed, ensuring that a greater level will be retained. Those staff that unfortunately have to be released, will be looked after and supported, ensuring their wellbeing and your reputation will be enhanced as an employer of choice.
