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By Colin Lloyd
Redundancy often demands individuals to navigate through mentally and emotionally taxing circumstances in their professional lives. It currently rates as the 8th most stressful life event on the Holmes and Rahe stress scale, and the highest which is not family related. Redundancy can also have a far-reaching negative effect on the business if not handled sensitively and effectively.
For these reasons, we take a look at the risks involved with redundancy, and how employers can implement an outplacement strategy which effectively supports a smooth transition.
Making employees redundant is a challenge that many would choose to avoid if given the chance, but often a necessary evil in the event where certain jobs have been rendered obsolete. That being said however, it is important that employers handle redundancy in a structured and sensitive manner to avoid any negative repercussions to their brand and ability to take on new hires.
If an employee feels badly done by they can seek legal redress or, use social media to vent their feelings to a much wider audience who are much less interested in the facts. The impact on the organisation’s employer branding can be damaging, particularly when it comes to rehiring. We live in a digital age, where most employees are savvy in using social media and websites such as Glassdoor to find out what a company is really like.
In addition to the financial cost of the redundancy, employers need to factor in the impact on employee engagement of the surviving workforce, and what happens to their productivity if they perceive their colleagues have been treated poorly. When it comes to talent retention, there is a danger the organisation can lose the very people it needs to survive, provided that they are sufficiently disillusioned. In today’s job market, opportunities are at pre-recession levels so individuals have choices and will vote with their feet.
Having an outplacement strategy in place can effectively alleviate some of the stress experienced by employees who are faced with the uncertainty of being out of work. However, there are some common pitfalls to avoid when managing an outplacement project. Outplacement is commonly perceived as a distress purchase made in isolation, and employers often make the mistake of haphazardly appointing inexperienced managers - who haven’t been adequately trained to deliver tough messages – to oversee the outplacement process, all whilst overlooking the productivity and wellbeing of remaining employees.
In order to avoid these errors, the CIPD outlines the following steps for employers to manage their outplacement strategy:
Choosing the right outplacement provider for your organisation depends on your objectives. There are a number of qualities that all companies should look for. These include credibility and reputation, competence, communication, an accurate and reliable service, responsiveness and individual client care. You also need to look on a more practical level at areas such as access (of offices, helplines and so on), system security and tangibles including equipment, materials and staff.
Involving the outplacement provider at the early stages of the process will help it to gain a good understanding of your organisational culture. This will enable it to choose the most appropriate team to work with the individuals affected. Bear in mind that good consultants are in great demand, so giving as much notice as possible of your timetable is useful.
From the organisation’s viewpoint, early involvement means that trust and understanding are developed, which increases confidence in the process and helps to “sell” the service to the affected staff. Understanding the decision from an organisational perspective can help the outplacement consultant to objectify the situation for people and help them to move forward more quickly.
Having your provider deliver change management programmes is useful when staff need to be retained for a period. This also provides the information and skills required to identify the early signs of anxiety and stress, and it ensures that everyone is clear about the support they can tap into. It acknowledges that people are feeling uncertain and that there is support in place for those leaving and staying, minimising the impact of “survivor syndrome”.
HR staff often face pressure from their colleagues during outplacement projects, so the presence of an objective and independent helper can be crucial for them. The provision of a “buddy” or mentor can alleviate the pressure. This allows HR staff to let off steam or talk through difficult situations in a safe environment. If there is no employee assistance programme in place, staff helplines can often be supplied by the outplacement consultancy.
Supply the outplacement project manager with information about the affected employees, so that they can be more professional in their response to calls. Give the affected individuals information sheets that inform them of their entitlement to outplacement services and what these entail. It is also important to have a named person from the consultancy to contact when these individuals are ready to start their programmes. Producing news updates as the support progresses is a good way of keeping everyone informed of what’s on offer. Newsletters are especially useful when the leaving period is particularly drawn out. They help to ensure that people are kept engaged throughout the process.
Establish what you want to achieve and agree the key performance indicators against which the provider will be measured against. Meet the provider regularly at the beginning to ensure that there are no teething problems and check that you are satisfied with what is being measured. Consider what is important to the organisation and whether the proposed reporting systems are going to give you what you need. Share information and cultivate an honest and open relationship with the project team. Remember that you’re all working to the same goal: client satisfaction.
As the project progresses, ensure that the success stories about people who have left are fed back to the remaining employees. It helps them to hear about the level of activity and support that leavers are receiving and there will be good news to communicate. This can be done easily via newsletters or the intranet. An online alumni section can be a way of keeping colleagues in touch – and you never know when the organisation may want to re-engage the talent it had to lose this time around.
Colin Lloyd boasts 20 years of experience specialising in career management and providing recruitment solutions to a variety of businesses. He is currently a Divisional Manager for Search Consultancy’s Insurance/Financial Services recruitment branch in Leeds. His integrity, dedication and innovative approach to recruitment enable him to establish significant relationships with both candidates and clients alike.
Here at Search, we not only aim to support our candidates in their career endeavours, but also enable our clients to uphold best practice standards when handling sensitive issues associated with redundancy. Whether you're a candidate looking for your dream job, or an employer who needs consultation on human capital management, please do not hesitate to contact us here.