30/04/2009 - 00:00

Consultation key in redundancy strategy

30/04/2009 - 00:00


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BUSINESS owners have been urged to understand their legal obligations when making staff redundant.

BUSINESS owners have been urged to understand their legal obligations when making staff redundant.

Chamber of Commerce and Industry WA senior labour relations advisor Simon Bibby said with new industrial relations legislation commencing in January 2010, companies needed to be aware of the implications regarding the new national employment standards.

"Employees have a psychological contract or investment into a business and if you damage that, that ... a loss like that in turbulent times could be very costly for business," he said at a recent business forum.

Mr Bibby suggested business owners regularly meet with employees and outline why change in the organisation has happened, what changes will take place, what steps have been taken to manage change and the impact on employees.

He said consultation with employees about the future of the business was essential and that managers should explore opportunities for staff to take leave during projected quiet periods.

"Businesses need to outline what could happen [with the business] in the future, plan for contingency and reach a prior agreement in writing with staff about procedures in the event that redundancies are made," he said.

Mr Bibby also suggested that businesses retain key employees and reduce the hours of non-core staff during down times.

His comments were echoed by recruitment and consultancy firm Chandler Macleod Group, which said poor redundancy strategies had led to an increase in the poaching of organisations' remaining talent.

CMG executive general manager, David Reynolds, said headhunting top talent was particularly prevalent in professional services, banking and finance, engineering and mining.

"Communication, support, understanding and empathy are essential when redundancies have been made," he said.

"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.

"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."


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