Best practice: Restructuring your workforce

you want to effectively realign your workforce and meet business objectives,
nothing will help you more than having a well-thought-out transition plan
before the crisis hits, says Tony
Gould, managing director of DBM outplacement and career transition services

Ideal vs. reality

the HR department should have three to six months to develop and execute a
comprehensive strategy for planning, communicating and completing layoffs
and/or restructuring. However, decisions to restructure or downsize are driven
by bottom-line business issues, and achieving sought-after business results
within the shortest possible time is a priority for everyone.

the time to think through the major elements of downsizing or restructuring is
when these events are just a distant possibility. That way, you can be prepared
to meet tight deadlines while also ensuring your organisation comes through the
event with the workforce competencies, morale and focus required to achieve its
business goals.

Five best practices

more than 30 years of consulting, DBM found the following five elements
integral to effective organisational change:

  1. Establish a transition team
  2. Develop a communications
    plan and strategies
  3. Conduct critical skills
  4. Design severance plans, if
  5. Activate retention

the following outline of best practices cannot begin to cover all the details
of a workforce realignment, HR can use this as a framework to create awareness of
the needs in each of the five areas. Doing so will help you shape expectations
internally, which increases the likelihood that your organisation will
accomplish its downsizing or reorganisation successfully.

Establish a transition team: Your
organisation’s leadership will set the direction of the restructuring or
downsizing effort; HR will carry it out. A third entity, a cross-functional
transition team, is needed to define the action plan and corresponding time
line, foster organisation wide buy-in, and handle issues and decision-making
tasks that might otherwise overwhelm the HR team.

the transition team will be composed of representatives from all areas of the
company – including, but not limited to, those likely to be affected by the
downsizing or restructuring – and should include all staff. Often, a
representative from the organisation’s outplacement consulting firm also
participates in the transition team.

the team has been formed and its responsibilities distinguished from those of your
leadership committee and the HR department, it will be ready to get to work

Develop a communications plan and
One of the transition team’s major responsibilities will be to
help the organisation develop a comprehensive communications plan.

maintaining the confidence and commitment of all of the organisation’s
constituencies, from the investing public to retained employees, requires a lot
more than a new summary plan description.

well-crafted communications addressed to meet each constituency’s information
needs are key. And none are more important than those from the leadership.
These need to tell employees early on about the challenges the organisation
faces and fully explain to them the rationale behind the decision to downsize
or restructure.

addition, specific communications strategies, guidelines and training will be
required for managers who interact with the press and key customers, as well as
those charged with notifying terminated employees and addressing retained employees’

Conduct critical skills analyses: Who goes? Who stays? ‘Last hired,
first fired’ criteria often strip organisations of the workforce competencies
they most need to achieve their business objectives. By conducting critical
skills analyses, your organisation can identify the competencies that will be
required as the company continues to evolve.

information will be key to decisions about whether to use voluntary,
involuntary or a combination of separation programmes and to designing them to
ensure the workforce possesses critical competencies after the downsizing or

Design severance plans: The best severance plans balance two organisational needs: to
reshape the company’s business within a realistic timeline and budget and to
help departing employees bridge the loss of steady income during their career

factors enter into severance plan design as well, including legal requirements,
union agreements, separation clauses in employment contracts and the need to
keep certain employees on staff long enough to complete critical projects or
close plants.

addition, long-held practices that peg severance to the employee’s length of
service are now giving way to more innovative solutions, for example, recognising
that job search times and challenges vary according to employee age and pay
level. Many companies design severance plans that serve both the organisation
and its former employees better than plans based solely on length of service.

Activate retention strategies: During
and after a downsizing or restructuring, employees fear that they will be
working in a changing environment without structure, security, direction, or
continuity. The more comprehensive your strategy for realigning your workforce,
the easier it will be for your organisation to allay that fear and keep it from
resulting in unwanted turnover.

honest and open communication about project-related and organisational next
steps; career management education; and ongoing management availability and
support will be critical to safeguarding employee confidence and commitment.

Ten mistakes you don’t want your managers
to make:

after a major downsizing or restructuring, key constituencies inside and
outside your organisation will still recall the event. Consequently, how your
management team communicates and behaves during this turbulent time
dramatically affects your organisation’s ability to keep its image positive and
its workforce productive over the short and
long term.

managers to avoid the following mistakes and you will ensure the memories of an
organisation’s ‘bad time’ don’t translate into a label of ‘bad company.’

  1. Disappearing
    after job terminations
  2. Adopting
    a business-as-usual attitude
  3. Delivering
    pep talks that ignore issues
  4. Not
    providing direction
  5. Loading
    people up with work
  6. Meeting
    only with favourites
  7. Making
    careless comments
  8. Getting
  9. Guessing
    about unresolved issues
  10. Making promises that can’t
    be kept

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