Businesses cannot afford to run for cover during redundancy storm

by 06 May 2009

Growing numbers of Australian businesses are coming under threat because poor redundancy strategies have led to an increase in the poaching of organisations’ remaining pivotal talent, with headhunting of top talent particularly prevalent in the professional services, banking and finance, engineering and mining sectors.

Peter Gleeson, executive general manager of professional and executive recruitment for Chandler Macleod Group (CMG), said that after a redundancy many remaining employees feel concern they will be next in the firing line because of poor redundancy and workforce planning practices which have left them feeling fearful, stressed, overworked and open to approaches by competitor organisations.

Recent CMG research found that 76 per cent of candidate respondents – those currently working for organisations that have recently made redundancies – plan to move jobs within the next six months, Gleeson said.

“The instability resulting from restructuring means that many organisations can be guaranteed that their strongest competitors will be taking advantage of this situation and will be actively looking at ways to poach their top talent and it’s crucial that businesses get on the front foot in order to secure their core talent pools,” he said.

“Unfortunately, at a time when all employees are looking for guidance, many organisations lack the necessary leadership skills to navigate their business through a severe economic downturn. In the 1990s recession, many of today’s leaders were themselves workers or in middle management and did not gain hands-on experience in restructuring and evolving their workforces. Management styles need to be significantly altered in negative times and some are only now realising that they are ‘recession novices’.”

In addition to head-hunting of high performers, Gleeson is seeing a number of strong companies targeting potential takeovers, with many also redirecting their energies and resources to repackage portfolios, goods or services that meet the current and ongoing needs of customers.

What can businesses do to retain top talent?

Openly communicate during and post redundancies. Communication, support, understanding and empathy are essential when redundancies have been made. Remaining employees want to know that colleagues, who have lost their jobs, are being well supported with counselling and outplacement services. They also want to understand how the flow-on affect will impact their workload and how they will be supported. The important thing is to be as open and honest and do not make promises which cannot be kept. However, remaining employees should understand that they are seen as key people within the organisation who will be able to take the business through this challenging period.

Develop a core nucleus of people supplemented with contract or temporary labour. A broader and smarter policy is to retain and develop a core nucleus of people and supplement it with contract or temporary labour to ensure the team of pivotal talent is not burnt out.

Set mutually agreed KPIs. Leaders need to explain the revised strategy to employees so they understand their roles will need to change as a result of the reduced headcount. Also, they need to understand what’s most important in their day-to-day roles to make a difference to the organisation while being aware of the up-skilling and reward they will be given for taking on additional work. One of the most important things to put in place is rigid parameters on what’s expected from each employee by setting mutually agreed KPIs and rewards.

Understand the resilience and stress levels of each employee. The best leaders are the ones that take the time to understand what’s going on with their people and have empathy and understanding. It’s essential to openly communicate with individuals to understand their resilience, as well as the stress impact they are facing at work and home. Bottom line is you can’t avoid stress and overloading work in this market. However, it’s how you deal with and accommodate it, and how you treat each person. At all times, leaders need to show respect and continue to recognise and reward employees emotionally or financially. Remember, creating a strong business is a team issue.

Source: David Reynolds, Executive General Manager of Chandler Macleod Consulting


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