Article
Two: Redundancy by Don Mitchell
Having been on both sides of the table when it comes to redundancy, I can tell you that neither side is a pleasant place to be. They both suck. Being made redundant is a pretty awful experience for most - although some do see it as a release, and others as a new start - and being part of the process that ultimately decides who stays and who goes is fraught with personal dilemmas.
I've been made redundant twice, both times in the early 90's while in a different career. Both of my experiences were handled pretty badly. I understand why the decisions were made, but the execution (maybe that's not the best word) left me feeling pretty used. It doesn't need to be this way, provided some basic rules are adhered to. If you need to think about making some cuts in your headcount, here is my advice on what you need to consider.
Be clear in your objective
Why are you planning redundancies? It may seem a little obvious, but have you considered the alternatives? I once worked for a large firm who recruited in hospitality. Following 9/11 the market was hit badly, and has never really fully recovered, so far as I can tell. The CEO sent out a note offering the option of salary reductions versus redundancies, and the vast majority of employees opted for the former. This was then worked up to include specific timelines for financial reviews of company performance, with a payback plan for those who performed built into a revised bonus plan. Just a thought.
Communicate
If making redundancies is your only option, then make sure that your workforce is aware at the earliest opportunity. Given the economic climate, unless your senior managers regularly hold long meetings behind closed doors, then your staff will know that something is up. They're not stupid, and being left in the dark will lead them to draw their own conclusions. At a time when you need productivity to be at its highest, the time lost through office gossip and surreptitious job searches will only add fuel to the fire. Tell them that there needs to be some changes and that you are reviewing the options. Let them know when you expect to be able to give them more information, put a date in the diary and stick to it.
Know the law
And know it well. Do the research you need to as it applies to your own situation, then talk to your lawyer to make sure that you understand it correctly. I know this adds extra cost, but it may well save you a fortune in the long run if you don't apply the basics rights that an employee has.
Establish your criteria
This may seem like a great opportunity to get rid of Johnny in the accounting team. After all, you don't like each other, and with him gone you won't have to face his banal questions in the weekly meeting. But is getting rid of Johnny going to have any effect other than the salary saving? If you have a competency structure and have used this through your recruiting and performance evaluations, then this should be pretty simple. If not, then now's the time to put one together. It needn't be exhaustive, but think about what areas of performance are going to be essential in getting you through the downturn and building again in the future, and grade each member of staff according to these areas. This way you have a fair and balanced way of understanding where the decisions you make will have the biggest impact. Make it measurable, this is no time for anecdotal evidence that would only be used to make sure that Johnny leaves the building.
Communicate again
Once you know your criteria, let the staff know. At this stage you may not want to break it down into specifics, but let them know that any decision is going to be based on a formula that will apply to all of them. Let them know how long the grading process will take, when they can expect to know the outcome. Again, put a date in the diary and stick to it.
Offer voluntary redundancy
At this point it may be appropriate to make an open offer to those who wish to accept voluntary redundancy. You may lose some of those who you would have wanted to stay, but if they make this choice then at least you are choosing from a pool that is more engaged.
Deliver it well
The day you deliver the news will be horrible, for everyone. Regardless of how you plan to deliver the news, there will be mixed feelings on both sides of the table. Opting for the individual meeting approach could drag out the feeling of dread in the office, and a better solution may be to divide the groups into those who will be staying and those who will be made redundant and holding separate meetings. Explain the situation to each group and then make arrangement to meet all on an individual basis to discuss how it affects them personally. Holding these meetings with those who are staying is equally important, as the team dynamic will change and you need to let them know what is expected of them in the new organisation. For those who are to be leaving, make sure that you have all the paperwork prepared in advance. No sense in dragging it out.
Support the ones you are losing
Do some research on the areas that most commonly affect people who have lost their jobs, and offer them all the information that they need. However, it's important to set a boundary on how far you are prepared to go, and assistance should really only go as far as advice. Make your offer of support consistent and don't do any favours for particular individuals if you are not prepared to do it across the board.
So there you have it. It may seem that these principles only apply to companies that have big teams and need to make sweeping cuts. However even if you are a very small organisation, making your process structured and transparent will go a long way to making sure that it remains fair, that all those who are affected are left with clarity on why, and gives you your best chance that those who stay remain engaged.
Don Mitchell is a recruitment professional with over 10 years experience across a diverse range of industries. Currently the Talent Acquisition Director of a company operating in construction across 16 countries, he is responsible for recruitment process and employer branding. He has previously worked in-house for multi-national corporations, and before that was an agency recruiter for several years.
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