Saturday, 23 February 2013

Impact of Redundancy on Workforce

In the current economic times it is often difficult to ensure that staff stay motivated and productive. An increase in absence levels in due to Stress and anxiety has been sited as a direct result of the economic pressure being felt across the economy which in turn adds pressure to employees to work harder, faster and smarter. Dealing with change in an organisation is valueable skill and often one which is purchased from consultancy firms to address. Independent consultancy firms are seem as less emotionally attached to the company and therefore they can provide the impartial advice around how to best restructure.

Unfortunately large organisations go through peaks and troughs of redundancy programmes and recruitment campaigns and against the backdrop of difficult financial times many employees lose their job. Looking at the impact on the affected individuals is perhaps the main focus and rightly so but do companies pay enough attention to the knock on effect of this?


Legislation in employment is strigent, difficult to navigate and often leads to very interesting situations which can damage the attitudes of the remaining workforce. A large organisation does not have the flexibility to simply move resource around and often has a recruitment campaign as a result of a redundancy programme. This would seem crazy, as you are losing the skills you wish to retain and having to go to the employment market to buy in new skills, which will not be effective for at least 3 months (average time employee takes to become productive in a new job). This is due to the terms of reference of a job and the clearly defined legislation that exists to ensure that employees are treated fairly, you may not change the majority of an employees role without having to displace and reinterview them for the new position. This can also be triggered during a company buy out or merger. The two existing sets of staff having completely different role profiles and responsibilities. Legislation is more difficult the more documented an organisation becomes, so with all the protection a role profile will offer the company and individual it can also be the hurdle which makes the employee lose their job or the organisation lose a valuable asset.

Managing change

The morale of many employees at risk, of redundancy or having been selected to be made redundant with a notice period of 3-6 months, is often low which means that you have a risk in your business that needs to be managed closely, sensitively and without prejudice. If they become dissengaged this can have a knock on effect to other members of the organisation, cause friction amongst co-workers who have to pick up any slack in the workload and put pressure on managers who are under qualified to deal with emotional issues. Managing change is an entire industry and there are ways to ensure engagement levels remain high until the exit date, ensuring the employee feels included without enforced participation in irrelevant meetings and ensuring the impact on the wider workforce is minimalised through clarity around the reasoning and next steps of any redundancy. Some companies prefer to purchase external consultants to come in and provide this clear direction to their managers and hopefully educate their management pool for any future issues that can arise.

Garden leave

As a last resort often companies will pay the employee to not be at work, instead having others do their activity and allowing the employee to refresh their CV and work on skills for a career move. This is not preferred as it can send out a negative message about that employee and cause friction which may be difficult with any future dealings. In large companies it is never a good idea to burn bridges as they may well be back one day to help the business again. Garden leave is difficult and expensive to manage and therefore would only be if the negative impact on the business or the individual was such that the subsequent cost was worth it.

Good Leavers

A good leaver is always a good sign, and through continued dialogue can be acheived easily. With many large organisations it is worth discussing future opportunities and the impact the last few months will have on any future employment with the company. Employees will know that in today's world a career is no longer a 40 year sentence at the same company but a smaller collection of roles which add to their diversified CV and experience. So the likelyhood of them coming back to a company is higher than ever before. Also ensuring that the management recognise the effort against a backdrop of a difficult event is a good tool to ensure the employee remains engaged.

No comments:

Post a Comment