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Minimising the fallout from staff cutbacks

Opinion differs on how to manage staff cutbacks, but outplacement services agree that good workforce communication is crucial to outcomes, as Susan Bower reports.

REDUNDANCIES are now considered a part of workforce life, but despite the current level of familiarity with the process, the pain is no less acute for all involved.

However, staff cutbacks can be managed so as to minimise personal scarring and long-term company damage, personnel professionals advise.

The size of a company and the extent of its restructuring may make the associated logistics different from workplace to workplace, but anecdotal and industry research backs up the obvious, that all involved in the process need to be treated with respect.

Companies can do a lot of damage to their own profile – be it a long-standing reputation as a desired place of employment, or as a stable investment – if they do not heed such realities.

However, with feelings running high, and chief executives and line managers taking on roles they wish were not their lot, the notion of respect sometimes appears at odds with the need to tell someone they are no longer wanted.

Murdoch Business School lecturer Brenda Scott-Ladd says being up-front about the need to put off staff is part of the respect aspect, but acknowledges this is often difficult to deliver during proposed corporate mergers and takeovers.

But people whose input has been previously valued can still be shown respect if the company can provide support counselling, plus lead time to prepare, adjust and re-skill.

Some personnel experts believe the most damaging way to let go of an employee is to tell them of the decision immediately prior to requiring them to leave the premises.

In certain industries, and with particular positions, this may be the most secure option, Ms Scott-Ladd says, but in most cases is not required.

It sends a message of distrust and is consequently viewed as harsh treatment.

If employees are fairly treated when made redundant they can accept the reality much better, Ms Scott-Ladd says.

Insight Career Management principal Annette Walker says while there is no magical way to manage cutbacks, certain criteria are critical to achieving the most desirable outcomes possible.

Certain financial matters are obligatory, including accrued leave and some form of redundancy payment.

For general employees this is most usually between two and six weeks’ remuneration for each year of service.

Outplacement support is not required, but recognised as valuable in assisting those leaving and those staying to move on with greater ease.

This type of support offers services to company top management, human resources personnel and line managers, in how to logistically manage the process.

This involves how to physically provide privacy and ensure confidentiality when delivering the message to those who are to be let go.

The support service also provides an independent profess-ional, on-site on the day, to emotionally support those who will be leaving.

One group often forgotten by company management is the survivors.

These employees are left to deal with the loss of friends and long-time colleagues, possibly in conjunction with taking on new and perhaps additional roles as a consequence of the departures.

Some may feel guilt, others envy, at who was and who was not singled out for redundancy.

But the survivors are vital to a company’s prospects following lay-offs, Ms Walker says, and new teams cannot be productive without the emotional side of the lay-offs acknowledged and dealt with.

Team-building exercises, focus groups, management workshops and individual counselling support can assist.

These services are particularly important when a large organisation, such as a bank, announces it will cut staff by significant amounts over, perhaps, a two-year period.

These types of lay-off are particularly difficult, Ms Walker says.

Not knowing if you will be one of those losing their jobs can be painful, but so also can knowing you will be forced to leave in six months’ time.

This can be damaging for all concerned. The employee cannot do anything much about a new position, and can lose motivation in their ongoing, but now short-term position.

This, in turn, affects the other workers.

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