#1 Mistake Companies Make in Redundancies

The simplest way to share the #1 biggest mistake companies make in redundancies is to share a recent case study.

Recent example

I met with a client last week who was struggling. Their business had been suffering through the resources downturn and they needed to make staff cuts not only to survive but because there was no work left to do and nothing on the horizon.

My client manager was a compassionate person who knew the effects that redundancy would have on his team, a team that had been with him for years across many projects and industry highs and lows. He'd held on as long as he could, he hadn't wanted his staff to worry about their job security or providing for their families so they were blissfully unaware, but now the inevitable was imminent.

And herein lies the problem, and the obvious solution all in one.

You see when it comes to redundancy, the biggest mistake companies make is not communicating early enough.

Managers feel they need to bear the brunt of the worry about budgets, winning projects and staff security, and they don't realise that employees just want to know where they stand.

A Simple Solution

If my client had told their employee six months earlier (as is very common in industries such as banking - see article re NAB in today's news here) that without securing a project by October this year they'd need to restructure, it would have given people time to mentally prepare (not just quickly change jobs which is what some managers fear).

Also rather than spending your budget on an extra 3 - 6 months of salaries thinking you are helping, instead invest in a Career Support professional (specifically an Outplacement provider) to help them in preparing for their foray back into the job-seeker market. For about 2 weeks of their salary cost, when the times comes to make that redundancy decision - they will secure a job TWICE as fast and have a lot of stress and worry taken away from them.

In the current market, that can mean that instead of sitting at home for 6-12 months unemployed, they will meet the job market well prepared, less stressed and often excited for the future.

Don't worry about good staff leaving you, keep in mind that in doing the right thing by your employees, you are doing the right thing for your business long term.

And if you win that big project? Great. They will still be there with you and grateful for the investment you've made in their future. They will trust you.

If they've already moved on? Then they might come back now or down the track. Very often I have seen good employees leave during dark times or following redundancy, but later return to their previous role. Communicating early shows respect and that you're putting their needs first. People respect that. Honesty really is the best policy.

Can you guess what the #1 Biggest Complaint Employees Have With Redundancy is?

Shock. They didn't see it coming at all or that it would be their job on the line, or an issue with the way it was communicated. That's quickly followed by anger and resentment. That's not good for you as the employer and it's certainly not good for their mindset and long term prospects.

To recap:

• Communicate early with respect, compassion, openness.
• Instead of 'hanging on' too long, get a career (outplacement) consultant in to help. It is absolutely invaluable.
• Have faith in your team and have those difficult conversations, it's better for you as their manager, your team AND the business.

If you're in a position where you might need to make redundancies please feel free to reach out for a free consultation, I'm always happy to share advice on how best to communicate with your staff for their benefit and to help you understand your legal obligations.

Email me at [email protected] for a free pack on best practice advice for communicating the redundancy message to your staff.