With the likelihood of lean times ahead we’re starting to see the inevitable news headlines describing employee misery at the prospect of job cuts. But in the words of 1980s cover version pop hit by Bananarama: “It ain’t what you do, it’s the way that you do it.”
Just the other week, EMI announced swingeing job cuts. Few would disagree that new owner Guy Hands is making tough choices to turn the business into a profitable one. Finances aside, the issue that has drawn the largest media attention is the effect these redundancies have had on his workforce. Robbie Williams and The Rolling Stones are just the first to announce they’ll be pulling future albums, mainly because of the departure of UK head of music Tony Wadsworth.
Ideally, HR and communications teams should have equal billing with the finance department when it comes to planning a turnaround strategy. As it is, EMI’s bad press will have had an effect on long-term staff engagement and productivity, which will, in turn, affect the organisation’s ability to turn the corner to a more profitable era.
Working in an environment where redundancies are occurring causes severe levels of stress among all employees. And once the redundancies have taken place, there exists an equally lengthy time of uncertainty, disengagement and resentment among those who remain.
All these symptoms will be acutely felt by those staff (artists and non-creatives) who remain at EMI. The most talented will be snapped up by competitors, and it is to these very people that the organisation will need to turn to help improve its ailing fortunes.
The effect of ‘survivors syndrome’ is evidenced by the emotions felt by staff. Shock, betrayal, anger towards management, guilt that they have survived and uncertainty about their future leads to decreased motivation.
As colleagues leave, those who remain will lose the social networks they have worked within for many years, which can lead to loss of productivity. Staff will become more indecisive and risk-averse, and loyalty towards the company will decrease while employees become more focused on their own careers and employability.
HR and occupational psychologists have a range of skills to help mediate these effects and offer solutions. And clear communication throughout the process, along with honesty and transparency in strategy and purpose, go a long way to help rebuild the employee’s psychological contract with the company.
At EMI, Hands advocated a communication programme built on ‘transparency and trust’, but as Lucy Kellaway astutely observed in the Financial Times, “artists do need managing”. Artists, like the rest of us, need to hear messages that relate to their needs, desires and fears, and Hands has clearly not done enough to build their trust. Only time will tell what levels of trust he has built with the rest of his employees.
Maintaining an active focus on employee engagement is vital. If an organisation actively invests in the development of its ‘survivors’, it is effectively making a public recognition that as an organisation we value you and are investing in you for the long term.
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Smoothing this transition period is a key role for HR and shows exactly the strategic impact that HR, organisational development professionals and occupational psychologists can have on the business.
EMI had to make some tough choices to turn the business around. The financier will assume cutting costs equals cutting people. It is the role of HR to ensure the financiers understand that their biggest asset is their people and, accordingly, their biggest chance of future profitability.
