when an economy is experiencing a slight decline or downturn, restructures and redundancies will always gain greater attention.
But restructuring can occur at any time in a business' life cycle – due to loss in business, reduced profits, a directive from global head office, new management or the merging of two or more companies.
While making someone's position redundant is a challenging management decision, it will always have the most significant impact on the employee. Yet it is up to the employer to handle the situation in the most appropriate and considerate manner so that the employee can move on quickly and find new employment, feeling that the organisation they are leaving treated them with respect.
21& businesses plan to reduce their headcount in 2009, according to Randstad's 2009 Employment Trends Report. With unemployment reaching almost 6% in Australia, all businesses, both large and small, need to be prepared to handle redundancies.
Speak with anyone who has been retrenched; more often than not, they will tell you about a terrible experience they had with how it was handled. This can have a detrimental impact on the organisation's reputation.
Plenty of managers are tasked with giving someone the news, which may have had to do this before and assume they know the best way to communicate it. They also believe the person being retrenched will be 'just fine.' But no one can predict how someone will react to redundancy news.
For some, it might be a shock, but often their initial reaction masks their true feelings. Others who react badly at first may look more positively at the situation after they have had time to reflect. A few may even be delighted by the news and the opportunity for change, taking it as the ideal time to travel and pay off bills with their redundancy package.
managers must prepare for these different reactions and the myriad combinations that can occur.
A script can be an excellent place to start. Planning out what to say and how to answer possible questions can be a helpful guide and help prevent managers from entering the meeting unprepared. It's also essential for those making restructuring decisions to take advice from colleagues who may have experienced this. By checking what worked and didn't, managers can prepare the best possible way.
It's likely the manager informing the employee might become nervous. Making someone's position redundant is not pleasant, and it's not a comfortable situation for anyone. Managers could expect to feel anxious before and rotten afterwards.
To help, managers should always have someone on-site on the day – an outplacement consultant, HR manager or business coach – who can support the person giving the news and the person receiving the information.
Managers need to remember the issue of redundancy is not confined to the meeting where the news is given to the employee. An employee may initially take the information well but soon become overwhelmed once the session has finished. They may suddenly feel that they don't know what to do next, where to start, and what to think, and they need assistance coping with the news.
On the other hand, the manager can be oblivious to this, leaving the room feeling things had gone well.
managers must not see the meeting as a one-off.
They need to follow up to check how an employee feels and offer advice and support to the employee on the day and for some time after receiving the news. At its most basic level, this should include follow-up meetings with the employee to monitor their feelings and offer advice and support. Managers should also make themselves available at other times if the employee needs to speak to them for advice.
The use of an outplacement service can also be beneficial at this stage. Currently, 53% of businesses in Australia use an outplacement service, which provides advice to managers on how to deliver the message – what to say, what not to say, how to say it – and can provide support, advice and consultation for those being retrenched.
Through consultations with interim management and career transition coaches, outgoing employees can maximise their career opportunities and plan their careers for the next six months to two years and beyond.
Offering outplacement services is not just felt by the person being retrenched - there are benefits for all parties – the manager, the organisation, the employee and the remaining employees. By offering career transition coaching, the organisation demonstrates to employees that whilst they had to make a commercial decision, they look after their employees. It can show staff who remain that their colleagues were supported and the positive outcome.
This can help generate loyalty and understanding amongst staff, which translates into many positive benefits for the business.
Whilst a manager can prepare themselves for communicating a redundancy, it can often be a great shock for the employee.
so how can someone retrench prepare, and what steps can they take to ensure the next stage of their career is successful?
For some, being retrenched may not come as a great surprise. If the organisation is going through a difficult period and other colleagues are leaving, employees can take steps to prepare themselves for the news. Employees can place themselves one step ahead of the announcement by updating their resume, keeping an eye on the current job market, and discussing opportunities with recruitment consultants.
Building and maintaining networks are vital at this stage.
But for many, it can be a great shock. It can be frightening, disheartening, and a very stressful experience. How an employee reacts in the first few hours and days can significantly impact their career for years to come.
firstly, employees need to understand and accept redundancy.
All employees need to remember that when hearing the bad news, the position is being made redundant, not the employee. However, the employee is the one that will still have to cope with the consequences.
In the meeting, employees should ask as many questions as possible about the redundancy package and the services they offer. Employees need to understand their rights under their contract, the redundancy package they are entitled to and what services are on offer to them to help them get back on their feet.
Whilst an employee may feel anger, betrayal and resentment towards the organisation. They should grasp the offers of advice given to them. If an outplacement service is being offered, employees should access it and the tools available to them soon after hearing the news.
By drawing on the expert advice of consultants and accessing the wealth of career advice available, employees can quickly place themselves in a favourable position to go out and secure their next job.
It may seem an impossible task at the time, but when leaving the meeting, the key for employees is to stay motivated and take positive steps to get back onto the employment path.
Making the most out of contacts, keeping informed about the job market and registering with recruitment consultants will help the employee hear about any suitable vacancies.
employees need to be proactive in their job hunt.
Many jobs are not advertised, so making direct applications to organisations may also open essential doors. The hidden job market is where many people find their next role.
Retrenched may also allow many employees to make a career change. It may be the ideal time to venture into an industry they've always wanted to work in but never had the time to try. Making this industry change is often more successful if the skills and experience are easily transferable.
Above all, employees should focus on seeing this as an opportunity to control the next chapter of their career. An employee sitting in a meeting room being retrenched may feel their future looks bleak, but it can be one of the best things that could ever happen to them, rejuvenating them and their careers. It's often with the benefit of hindsight that people realise that.
For further articles and advice on employer branding, strategic talent management, employment trends and employee engagement and retention, visit Randstad's knowledge centre workforce360 today.