More than half of Australian employers anticipate they will need to restructure or reorganise their operations this year, according to a recent report.
It found that 50 per cent of those who indicated a need for restructuring cited changes in the external economy as their main driver, while 42 per cent cited a need to drive greater efficiency or competitiveness throughout their business.
Reducing operating costs had become a major focus for many organisations in the current climate, according to Simon Moylan, general manager of talent management for Hudson, which conducted the survey.
“Given salaries make up the largest portion of fixed costs for most businesses, it’s understandable that over the past year, we have seen a threefold increase in the number of employers looking to reduce their permanent headcount,” he said.
“While cutting staff numbers through redundancy programs allows a business to meet short-term cost reduction goals it must be remembered that a poorly implemented program can have significant and long-lasting negative impacts on employee morale, productivity and a business’s ability to respond rapidly when the market improves.”
The Hudson report also found employers believe the most important aspects of a restructure/reorganising program include: ensuring clear communication throughout the transition process (68 per cent); ensuring managers feel supported through the process (41 per cent); ensuring impacted employees are treated with respect and dignity (39 per cent); and minimising the impact on remaining employees (39 per cent).
“Open, honest and frequent communication during the restructure process is vital and it’s very encouraging that almost seven out of ten employers see this is the most important factor. Open communication is a cornerstone to effective restructuring,” Moylan said.
“It’s also positive that minimising the impact of the restructuring process on remaining employees also rated highly. Ensuring equal focus on those who remain with the business and those who are departing, is a vital aspect of any such process.”
The report, which took in 7280 employers nationally, also highlighted competency levels of line managers involved in the delivery of a redundancy program as an area of concern for many employers, with 53 per cent of respondents saying their managers needed either some or a lot of support and development.
According to Moylan, ensuring line mangers involved in a redundancy program are suitably experienced and equipped will vastly improve the chances of a smooth transition.
Hudson offered the following tips for a successful restructure:
• Plan well. The success of your restructure will depend on the quality of your initial plan.
• Your communication plan should not only cover the announcement itself but the lead up to it and the aftermath.
• Develop concise messages that clearly demonstrate why the changes were necessary. Repeat key messages often through a variety of communication channels.
• Suitably equip managers so they can confidently lead the restructure – most managers will require training to conduct separation interviews.
Support for those leaving
• Build outplacement services into the package for transitioning employees; outplacement services assist employees in dealing with the immediate change. Coach employees through the process of finding a new job.
• The opportunity to say farewell is as important for departing employees as it is for the survivors.
• Both personally and in formal communications, be sure to acknowledge the contribution departing employees have made to the business.
Support for those remaining
• Provide managers the opportunity to meet and discuss the effect of the restructure and hear how others handled it. This will enable them to process what has happened and move on.
• Ensure employees and managers understand the culture and strategy of the new organisation and their role within it.
• Regularly measure employee engagement to assess whether any steps need to be taken to lift morale.
• Ensure managers have the skills to coach their teams around their career development.