PositivePeople October 2, 2019 No Comments

AVOID THE PITFALLS OF RESTRUCTURING

“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.

  1. 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.
  2. Each person potentially affected should be treated with compassion, care and fairness.
  3. 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 consideration.

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.

Change Management

Making Changes Smoothly and Without Drama

Plan a smooth restructure that enhances the business and allows the future to be tackled with confidence.

Sometimes it is essential to make changes in your organisation. Markets shift, customers demand more, technology advances and business practices move along. It is imperative that organisations stay ahead of the game and adapt to rapidly changing environments.

Making changes within your organisation to meet these challenges can often involve difficult decisions that will affect your people’s employment.

It is not just the human side of the changes that can keep you awake at night, but also the legal risks involved. Additionally, a badly handled restructure does your employment brand no favours. A badly handled change initiative can sully how attractive your business is to work for as well as negatively impacting on your current team’s satisfaction, engagement and retention.

Successfully navigating your way through a restructure, relocation or major system or process change requires expert planning and careful implementation. A fair process throughout is essential.

Once the decision is made to explore the possibilities of a change, then a proposal needs to be developed which explains the background, provides the genuine commercial reasons and provides a justification for the proposed changes.

Any changes contemplated must be for a genuine commercial reason.

A key element to be aware of is that from the moment a change idea is conceived until after all relevant feedback has been received is that it is only a proposal. Only after a fair process has been conducted, and all relevant feedback received and carefully considered can a decision on the proposal be taken. Up until that time the change contemplated is simply a proposal, nothing more. This is still the case even if you’re facing a certain change – for example, the lease running out on a premises meaning that some sort of change is inevitable.

The people affected need to be provided with a fair opportunity to provide their response to the proposal. If redundancies are a possibility then all alternatives to redundancy need to be explored to see if any people affected by the changes could be accommodated elsewhere in other roles, or other working arrangements introduced.

Once the decision on the proposal is made, then those affected need to be informed.

Throughout the process everyone affected needs to be treated with the utmost care and consideration. Suitable support in the form of the offer of counselling and CV/career path assistance should be offered to those affected. This will reduce your risk, but also ensure you are acting as a good employer and looking after your employees.

Because the discussions that are held are confidential, it can be difficult to maintain the engagement and morale of the rest of the team in the organisation as they naturally want to know what is going on. However, there is little choice but to wait until the whole process is completed before information like a new organisation chart and role descriptions can be shared.

If your Company is committed to creating a work environment where open dialogue, honest discussions, trust and fair processes are nurtured and promoted as part of the organisational culture, you and your team are most likely to come out of a restructuring process with a sense of optimism.

Following these guidelines should help you emerge from any change program with minimum risk and ready to take on the future with confidence. Positive People are well experienced in guiding, assisting and providing support to companies who need to make changes. Contact us today at info@positivepeople.co.nz or 09 445 1077 to discuss the details.