The right way to handle redundancies

There is a growing awareness among business leaders that the way an organisation handles redundancies sends out a very strong message about its corporate ethics and values.

The media are notoriously quick to pick up on perceived corporate wrong doings. And badly handled or large-scale redundancies make for juicy headlines.

The accountancy industry is no stranger to the inevitable cuts in headcount brought about by a downturn, or even a merger.

Getting it wrong operationally can seriously affect an organisation’s reputation and undermine its ability to retain and motivate the remaining workforce, as well as to recruit talent in the future. Redundancy is fraught with difficulties for the employer from a commercial and legal point of view, as well as the obvious human impact.

What makes for a ‘successful’ redundancy programme? Delivering the objectives in terms of financial cost savings is a must, but it needs to be managed sensitively and professionally. To maintain momentum and give the organisation and those leaving it the best chance at success, the message must be make a clean break and move forward.

For the employer there are four cornerstones to consider. Firstly, even though the aim of redundancy is normally to reduce costs, there is a growing appreciation that skimping on settlement packages is frequently a false economy.

To mitigate bad publicity some organisations use a ‘drip effect’, where small numbers of staff leave quietly and with generous levels of organisational support, reducing the likelihood of high impact headlines and lessening the risk of staff seeking legal redress, having signed compromise agreements as part of their settlement. The latter approach does have a downside in terms of impact on remaining staff, because the process takes longer.

Secondly, the organisation must consider how and when it intends to communicate a redundancy policy. Very often, a quick and clean break is best for all concerned.

The individuals themselves can begin to accept and adjust to their career transition more quickly and management does not have to deal with distressed staff over a prolonged period. More and more employers are choosing to sweeten the pill of redundancy by offering staff externally provided outplacement support programmes.

This facility provides people with time and space to adjust to the change and professional guidance on planning their next move.

The employer must explain that good quality outplacement offers individuals help with the development of essential job search skills such as research, managing recruitment agencies, networking, interviewing and CV writing.

It also frequently involves months of consultation with a highly trained and experienced career coach.

Lastly, the firm needs to move forward positively and dynamically with its remaining workforce. Redundancy programmes can act like organisational black holes sapping energy and reducing focus.

Attention is usually on those people who have lost their jobs, yet those that remain will also need support to ensure the inevitable drop in morale is reversed as quickly as possible.

Remaining staff need to know what career opportunities still exist following a major downsizing exercise and it is imperative that clear and attractive career development policies are communicated widely.

While the firm carries on, former employees can feel deserted. Though extremely painful at the time, in retrospect, many people view redundancy as the ‘push’ they needed to change employer or to find a more suitable and fulfiling way to earn a living. Misplaced pride may result in missing opportunities for support from the outplacement consultancy.

There are a number of things you as an individual should consider in order to survive redundancy. Firstly, make the most of the package and take independent financial advice to protect your interests. Independent legal advice if often offered by employers too.

Secondly, create a support network – now is the time to rely on family, friends, and in particular business colleagues. Keep in contact with colleagues and overcome any reticence you may have about networking as a job search technique.

Thirdly, make use of outplacement facilities, these are often offered as part of your package and give advantages including free training, access to first class research facilities and even news of job opportunities.

More importantly, focus on the future and try not to be bitter. Set yourself demanding but realistic deadlines to achieve certain tasks, such as finishing your CV within two weeks, contacting ten people from your network within a week. These achievements will help to keep you motivated and are essential for real progress.

Also make use of your skills. The attributes that made you successful in the past have not suddenly become redundant, too. They will help you be successful in your job search. For example, planning, communicating, decision-making, creative problem solving, assertiveness and influencing are valuable areas of expertise that can be put to excellent use.

Finally, remember the job search is a big commitment, don’t take on too many additional family obligations. Your job search is a full time occupation and will require much of your time and energy. You will also need a positive outlook, the drive to keep your approach fresh and a lot of resilience.

  • Beth Taylor is a senior consultant at the City office of Penna, human capital management consultancy.

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