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Legal Updates

Restructuring and redundancy

29 March 2010 #Employment

Following on from the article "Trimming The Fat", the statement that "handling a restructure or any other form of cost-cutting exercise properly can go some way to help protect your reputation as a good employer and to maintain staff morale" is perhaps the most important thought to take away with you.  Unfortunately, doing that properly doesn`t always come without financial outlay. 

However, there is life after redundancy - and I can personally vouch for that.  What helped me most of all was the provision of outplacement support:  and outplacement support isn`t just appropriate for those employees who may be leaving an organisation - it has a valuable contribution to make to how those who survive a restructuring exercise feel about their employer.

So, what exactly is outplacement?  Outplacement is practical career continuation support from professional consultants - support which is designed to help an employee move to the next stage in his/her career.  Outplacement support is also often provided to help ‘survivors` through significant corporate change.

All outplacement programmes - whether group or individual - are designed to help employees focus on the options available and make the right choices for the future - and that could include advising on how to set up a new business, returning to study for a change of career direction as well as looking for a new job.

However, if someone does want to find a new job, outplacement consultancy will provide guidance on how best to do that for each individual.

All organisations face change at some stage, whether on a large scale or just involving individual employees - how they handle that change will have a profound effect on the corporate image and employer brand.

Using outplacement at times of change within the organisation can help to smooth the process for all those involved:   there are three key reasons to use outplacement:

  • To help someone move on
  • To help those who stay
  • To make the process simpler

Managing The Outplacement Process

If the organisation is able to afford the services of an outplacement consultancy, this needs to be planned for as early as possible - in particular, those employees who are ‘at risk` will quickly become disenchanted if they have to wait for advice on, say, whether they should opt for voluntary severance or hope that they survive the restructuring process.

In any event, the outplacement process should be a joint one between the organisation and the outplacement provider - remember that the outplacement provider has done this before and can offer valuable guidance on how best to manage the process. 

Looking After The Survivors

How do ‘survivors` feel? They may feel:

  • Guilty - because they have survived the restructuring process
  • Angry - because some of their colleagues and friends have not
  • Confused - they may not know what they are meant to be  doing within the restructured organisation
  • Insecure - is it their turn next?
  • Uncertain about the future

They may also suffer from:

  • Shock - nothing is the same - their world of work has been torn apart
  • Frustrated - there`s nothing they can do about it
  • Stressed - the stress of going through the restructuring process and possibly being ‘at risk`

However, if they can see that their colleagues have been well supported during the restructuring process, they are more likely to be reassured about the future.

It is also important to consider the effect of restructuring on the organisation and research indicates that:

  • At best, employers may end up with problems retaining key employees because they feel……. "I may be next" and,
  • At worst, employees will be demotivated and lack the desire to do their best.

So, during any restructuring - and potential redundancy situation, organisations need to do as much as they can to ensure a positive working environment remains after the process has been completed.  It is worth bearing in mind that:

  • Employers often complete the process and don`t consider the needs of survivors - and they really do need to keep survivors up-to-date on what is happening and make it easy for them to ask questions
  • Employers shouldn`t assume that, after the redundancy process, it will be ‘business as usual` - they need to make sure the survivors understand why the restructuring was necessary and that the redundancy selection process was fair
  • Employers need to pay special attention to key employees and make sure they feel supported and secure in their future with the organisation - this can be an ideal time to introduce new career development and training programmes for those who remain.
  • Survivors are likely to be more positive if they perceive that their former colleagues have been treated equitably, using a fair process.

Employers also need to remember that:

  • Survivors may have an increased workload and new areas to cover - if a number of people have left the organisation, someone else has to pick up parts of the jobs that have gone
  • Both of the above have potential for negative impact  on performance and
  • Both of the above may increase sickness absence and give rise to grievances and both are very good reasons for asking the outplacement provider to include survivors in the consultancy or counselling they provide

In conclusion, therefore, a positive working environment following a restructuring exercise is more likely to be generated:

  • If there is a visible, fair and equitable process to deal with redundancies
  • If the survivors` concerns listened to; and
  • If a positive and forward-looking vision of the future is communicated

Judith Kiely
Forbury People Consultant
0118 960 4608

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

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