“This gradual but prolonged economic slowdown is
at risk of ceasing to be about the data and starting to become about the
people.” Sharon Zollner, ANZ economist.
With a sluggish economy impacting businesses across the
country, the unfortunate reality is that restructurings become an option for
businesses who find that the way they are structured is not optimal, resources
exceed the work available, or the business is being sold, partially
transferred or outsourced.
However conducting a successful restructure is not as easy or
simple as it seems (READ MORE LINK) and because of the adverse consequences
experienced by affected employees they have a high risk of resulting in a Personal Grievance.
- Its critical to
correctly move through the actual restructuring process. This can be a
minefield in its own right as each step needs to be carefully planned and also
set out in writing.
- Each person
potentially affected should be treated with compassion, care and fairness.
- Make sure that other
employees watching from the side lines can see that the process and approach
taken by the management is one of sincerity and fairness so that after the
process is complete no lingering feelings of dissatisfaction exist.
A restructuring has many elements in it that need careful
The first critical point to make is that any change, first
and foremost, is a proposal only. It is not simply a case of a
management decision that is then communicated with those affected. This mistake
is often made and results in problems for the employer.
The second important point to make is that there must be a genuine
commercial reason for the restructuring. It cannot be about individual or
group performance. Any performance related actions that management wish to take
need to be dealt with under a Performance Management framework.
The third essential point is that a full and fair
consultation process must take place with those employees potentially
affected. This requires a set process be followed that allows for
representation, time to consider the proposal, time to provide feedback and the
opportunity to suggest alternatives to a redundancy or to the change itself, or
in fact, feedback on any aspect of the proposal.
Once these steps have taken place, then, and only then, is
the employer in a position to decide about whether the proposal will proceed as
originally outlined, be modified in any way or scrapped.
It can happen that management wish to modify a role.
Usually a change of 20% to the role is the guide as to whether the role has
changed significantly. Consultation around this change should be conducted as
well. If it is marginal, then giving the employee the choice of either
accepting the new role or of taking redundancy can be the prudent decision.
If new roles are established, then there is a need to work
out how to fill the new roles. Options here include the placement of
employees whose roles are disestablished into the roles, running a recruitment
process internally or of advertising externally. This aspect of a
restructuring process can be very complex, as you have to ensure you offer the
right options for each employee and needs to be planned and managed well.
A key element of a successful restructuring process is in the planning. The planning needs to be meticulous so that the commercial reasons, the actual step-by-step process, the paperwork, the scheduling and a compassionate approach is thoroughly thought through and combined to achieve the desired result with minimum risk.
The paperwork and communication around restructuring is a critical element to get right.
Some employees in specific industries are afforded special protection in restructuring situations.
Because redundancy is such a life changing event for
those affected, emotions can run high with both those affected and their
unaffected colleagues. In this situation waters can be muddied. In an attempt
to be compassionate, steps can be missed, and the process placed at risk. This is exactly where a solid plan will stand
you in good stead as you methodically work through a fair process.
Ultimately what you are looking for is an outcome that
sees improvements required for the business come through as fairly and as
compassionately as possibly with as little adverse consequence to those
affected, and to the organisation’s morale and reputation.
Speak to us.
We have extensive experience in guiding you through these highly complex and risky situations. Contact us now if you need help.