Rebuilding following Restructuring and Redundancies

Many Community Sector Organisations have been forced to restructure their operations, implement pay cuts and/or reduce their headcount in response to cuts to funding. For most, the restructuring programme was a difficult process to minimise costs and optimise efficiencies whilst maintaining a high standard in service delivery.
Whatever the implications and outcomes, managers must now consider the impact of the restructuring on the workforce and the ways and means to ensure everyone is motivated and productive. After all, the future success of the organisation is highly dependent on the commitment and efforts of the remaining employees against a background of possible further cuts. So, many managers and boards of management will probably ask the question; how does the organisation rebuild morale and trust following restructuring.  Set out below are four key steps:

1. Responsible Restructuring:

It may sound obvious, but the way you carry out the restructuring and/or redundancies in the first place will have a major impact on the level of employee morale in its wake. Studies show that those who are retained by the organisation following the changes are more likely to be productive, innovative and supportive of the organisation’s goals if they perceive that the changes were carried out in a fair and responsible manner. So, the more time and energy the organisation spends on:

• planning the restructuring programme
  
• ensuring legal compliance
  
• communicating the reasons for the programme and
  
• supporting those who are let go or deployed
  

 the greater the likelihood of perceived fairness among those who remain. This will then have a positive impact on productivity and commitment.

2. A Team Focus

Restructuring and redundancies are stressful times for everyone involved; those who are let go are faced with unemployment and financial worries and those who are retained may experience job uncertainty and increased workloads. It can also be particularly stressful time for managers; they must make on-going decisions about resourcing, deal with questions from staff and try to minimise any negative impact on the service to clients.  During this stressful time the response of many managers is to ‘close their door’ and withdraw from interactions with the team. This is the complete opposite of what is required; managers must be accessible to staff, ready to deal with questions and issues as they arise and in a position to give ongoing feedback on the team’s performance.

3. A Cost Focus

Community Organisations will need to engage in ongoing cost control and cash management to ensure future survival and stability. In many organisations, cost control is seen to be the function of Management alone. However this is a short-sighted practice. All employees should be involved in the drive to minimise costs and inefficiencies. There are a number of ways to do this:

•    Cost reduction targets should be set and these should be communicated to all employees.
•    Employees should be encouraged to come up with ideas on how to save money.
•    Is employee time analysed and managed? For example is time wasted on low value tasks
•    Are there opportunities for outsourcing certain areas of your operations which will free up time for higher value activities? For example outsourcing payroll has proven to be 25-30% cheaper than running it in-house.

4. A Performance Focus

Many Organisations are now looking to implement performance management processes as a means of keeping employees focused on both the company’s goals and their individual goals and targets. Performance management is also critical to ensure that everyone is clear on their roles and reporting lines. Lack of clarity in these areas is very often a knock on effect of a restructuring programme. This arises as employees are sometimes required to absorb some of the tasks once carried out by their now redundant colleagues but often their managers fail to discuss and clarify this with them. It is important that these issues are resolved at the Communication and Consultation stage.  Ongoing feedback on progress against goals and targets is also essential to ensure all employees are focusing their time and energy on the priorities of the Organisation.  Previous editions of this monitor have dealt with Performance Management in more detail e.g. 06/2008 and 02/2009.