Workforce Planning and the Prospect of Restructuring

* Last Updated 14 April 2020

Planning

Over the past 4 weeks we have all become somewhat accustomed to constant and rapid change. We’ve learnt pretty quickly to take a step-by-step and day-by-day approach to avoid wasting time and energy on plans that quickly become irrelevant.

But, having dealt with the blow of the lockdown, the time has come to get ready to adapt and adapt again. Having contingency plans in place will be essential for you to navigate the next 12-18 months by being nimble and flexible.

A good starting point is to map out at least three possible scenarios – perhaps starting with a best case, worst case and a middle ground. These might include:

• Best case – Level 3 after 4 weeks of lockdown. Reverting to level 2 the following week. No further lockdowns eventuate. Borders remain closed, but non-essential national travel re-starts in June. Government stimulus packages are relatively successful and the economy, including your industry, shows promising signs of recovery.
• Middle – Lockdown is extended to 6 weeks. The country remains at level 3 for an additional 6 weeks, with some businesses needing to remain closed. National non-essential travel is restricted on and off throughout the year, there are regular school closures and occasionally it looks like another lockdown is possible.
• Worst case – NZ returns to Level 3 after 4 weeks but it’s too soon or community transmission of Covid-19 has sprung back under the radar. After a few weeks at Level 3, another lockdown is announced and this one continues for another 6 weeks. After that, Level 3 with heavy restrictions for a further 6 weeks. Your business is unable to open properly at Level 3 but can operate to a limited extent on-line, but your industry has been heavily impacted. Sales are virtually non-existent.

Now think through what impact each scenario will have on your workflow and cashflow. Then, how will you need to change or downsize your workforce to match this footprint? What will be the triggers (sales figures, production levels, cashflow) that will force you to look at headcount reduction? Consider how you can avoid ‘death by a thousand cuts’ – where you need to downsize, will it be possible to make a more significant change to avoid constant redundancies and hours reductions.

Restructuring

Having completed the planning, you should have a clearer idea of the conditions and thresholds that may necessitate a change process. Or, in some cases, it may be clear that you already need to consider the prospect of restructuring your organisation and reducing your employee numbers. This is a complex and difficult process.

Here is a step-by-step overview of what you will need to do next:

1. Plan

• First, you will need to write a business case for why you believe change is required. Include important details such as sales figures and projections.
• Next, write a communication plan – who is potentially impacted by this proposed change and how will you communicate with them? Individually, team meetings or a company-wide briefing? Will anyone be on leave during this time? How and when will you communicate with them?
• Finally, get your ducks in a row. Review Individual Employment Agreements, read Job Descriptions, pull payroll information to double check details such as pay, titles and hours. Run a risk assessment for each – is the role you are considering to be disestablished similar to another role in the business? If so, do both employees need to be included in the consultation process as two positions becomes one?

2. Consult

• Draft up letters for all affected employees. The letter must:
  • Explain the proposed change
  • Outline the proposed impact to their particular role
  • Give the reasons for this proposed change
  • Say what will happen to them if the change goes ahead
  • Include the details for how the employee can submit feedback and the deadline for this
  • Either propose a time for a meeting to hear feedback, or offer the opportunity for the employee to book a meeting if they want to ask questions or provide verbal feedback
  • Emphasise that no decision has been made, and that this won’t happen until you have received their feedback
  • Give details of a proposed timeline. Seek feedback on this as well
• Hold your consultation meetings.
  • Ideally, where only a small number of people are impacted and redundancy is a possibility you will hold these face-to-face. You can set this meeting up ‘informally’ by simply inviting the employee to a meeting, but we recommend that you let them know that what you need to discuss may impact their role, and that they are welcome to bring a support person – allowing them time to arrange this. In large company-wide restructures, and with the Covid-19 restrictions, this will not always be possible.
  • Ideally, read through the letter
  • Answer initial questions, but try not to get into receiving feedback in this meeting
• Hold feedback meetings. Often questions will be raised at these meetings. If you don’t know the answer, commit to coming back with it as soon as possible. You must remain open, honest and communicative throughout. If you take too long to respond to questions or do not answer them at all, you risk an argument that the deadline for feedback should be extended.

3. Consider Feedback

• It is important to consider feedback in good faith. If, as a result of the feedback, you want to make changes to the proposal you need to decide whether to go back and consult on the new proposal.
• Give yourself time to adequately consider feedback – usually 48 hours
• If you’ve received a lot of feedback from numerous employees, group it into themes and write out your response to each ‘thread’ and any changes to the proposal made as a result

4. Confirm

• Having considered any feedback and made a decision, you need to draft up a second letter outlining your decision. This should include:
  • A summary of feedback received and your response
  • Any changes made to the proposal as a result of the feedback
  • What your final decision is, and the outcome for the employee’s role, including timing. If applicable, you may include details around final pay
  • If redeployment is an option or a selection process will follow, provide the details for this
  • Consider what outplacement support you can offer and outline this in the letter – this could include career coaching, assistance with writing a CV, an interview technique workshop, and financial planning resources.

Change processes can be very complex and are difficult for everyone involved. Emotions are likely to run high and it is so important that you get it right. Positive People can help. Email us at info@positivepeople.co.nz or call 09 445 1077 for a confidential discussion.