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Redundancy takes place when employers reduce their workforce because a job or position is no longer required or when companies need to reduce costs to sustain the business.
Regardless of the reason, managing the redundancy process will always prove to be one of the most challenging tasks any HR professional or executive will have to face at work. Retrenchment could happen due to business restructuring or during a recession. Either way, if it’s not handled with professionalism and sensitivity, things can go south very quickly. It would not only have a crippling effect on organisational morale and culture, but it can also severely impact the company’s reputation.
Here are some key points to consider in your redundancy strategy. You can take these steps to protect your employees (existing and retrenched) and limit reputational damage.
5 tips for managing redundancy
- Know your legislation
- Communicate internally
- Prepare for press enquiries
- Get outplacement support
- Focus on employee well-being
1. know your legislation
Redundancy legislation and case law are incredibly complex. They differ from country to country, industry to industry, and employers must adhere to their obligations. Executives must fully understand the employee’s rights as well as the correct processes and procedures to follow at the planning stage.
This will not only ensure that the process is legally compliant, but it will also give your key stakeholders the reassurance that all employees are being treated fairly and with respect.
2. internal communications matters
Always have a strong redundancy communications plan in place before any conversations take place, internally or externally. HR professionals should either reach out to the corporate communications team or engage a public relations agency to support them in this crucial strategy execution.
There are typically three sets of communications toolkits to prepare:
- One for the leadership team
- One for those at risk of redundancy
- One to address the wider organisation
Always ensure clear, consistent and simple messaging with specific deadlines for each task. It is also important to keep the information confidential just within a small group of people and align that the announcement should not be shared ahead of the agreed date. People who have prior access to such privy information before it is announced should be limited to:
- Select senior executives
- Select HR and communications specialists
- Select legal professionals
3. prepare for external enquiries
Companies that have a prominent brand reputation or are placing a large volume of employees at risk of redundancy should always prepare a set of external communications assets to address queries from their external stakeholders (i.e. investors) and media.
This is even more relevant during the COVID-19 pandemic, as the media are quick to report on job losses. Journalists will also approach those who’ve been made redundant to cover their side of the story, which is why it is critical for companies to ensure their external messages are not only consistent, but also empathetic in terms of tone and delivery.
Having an approved statement and frequently-asked-question document means that the firm is able to respond to external queries quickly and balance any press coverage that has a negative sentiment. It is also important to be as transparent as possible when addressing external enquiries.
4. reach out for outplacement support
The retrenchment exercise is typically overseen by senior HR professionals who are responsible for organisational change. However, given the limited resources and confidentiality of such announcements, it can be difficult to make sure that every employee is being cared for.
HR functions are also increasingly expected to take on greater responsibility and accountability for the long-term well-being of their workforce. It is therefore not uncommon for executives to engage an outplacement expert to manage the end-to-end transition process, to help them navigate organisational change with ease and confidence as well as help their affected redundant employees secure new employment much faster.
Randstad Risesmart is an independent partner that can help organisations deploy employees to other jobs within the organisation or, where that’s not possible, move into a new role externally. Risesmart works closely with these individuals to secure a new, fulfilling and meaningful role through the job concierge service, which includes career coaching, CV and interview preparation and a personalised job search service.
Such professional outplacement services can help transform a traditionally negative job loss scenario into a positive and career-enhancing experience, which in turn protects the financial and mental well-being of those impacted as well as the organisation’s employer brand.
5. everyone's well-being matters
The positive news is that our research shows that employers are currently doing a great job. 76% of respondents said that they feel their employers are taking care of their well-being during the coronavirus pandemic. However, that is not enough, especially in the eyes of an employee who just received news that they have been retrenched.
Employers have a duty of care to their staff, which extends even after the employees have left the company. There are a number of ways HR functions can approach this:
- do not underestimate the importance of giving employees a dignified departure
- ensure those at risk know who they can speak to and what type of mental health support they have access to for an agreed period of time
- remind all colleagues to be sensitive and empathetic during this challenging period
- consider when it’s appropriate to conduct an exit interview (many outplacement partners offer this as part of their professional service)
- work with an outplacement partner who provides career coaching and tailored job searching services to affected employees