More redundancies, less leadership - the toll on people and the business bottom line.

With the raft of large redundancies and restructures of people you and I know and redundancy posts from connections here on LinkedIn it is hard to keep people calm about what could happen to them and who they can trust.

People are told one thing, to stay calm, all is okay and that there will be no more changes yet surprise there are more.

Justifiably people are concerned and have to question why they should trust what comes out of a "leaders" mouth.

To be clear redundancies and restructures occur for many reasons, such as cutting costs, organisational change, improving efficiencies, technology changes, performance improvements or economic conditions.

While redundancies and restructures occur there is a way they should and should not be handled.

I will leave it up to you to make your own mind up about how companies you know are handling them.

Let us talk about the potential impact redundancies have on the people left behind and those who have left the business, the bottom line and leaders.

What are the impacts to the people staying in the business?

1. Decreased morale: Redundancies especially large or multiple tranches can create a sense of uncertainty and anxiety among the remaining people. They may feel demotivated and demoralised, which can impact their productivity and overall job satisfaction.
2. Increased workload: When a large number of people are let go, the remaining people may have to take on additional responsibilities and workloads. This can lead to burnout and increased stress levels.
3. Loss of knowledge and expertise: Redundancies often result in the loss of valuable knowledge and expertise. The remaining people may have to fill the knowledge gap, which can be challenging and time-consuming.
4. Survivors guilt: Survivors guilt can manifest in several ways, including feelings of shame, anxiety, and depression. People who experience survivor's guilt may struggle with increased workloads and stress levels, as they try to compensate for the loss of their former colleagues. They may also feel demotivated and less committed to their job, as they struggle to come to terms with their feelings of guilt and remorse.

What is the impact of those who have left the business?

1. Financial impact: Redundancies can have a significant financial impact on those who have lost their jobs. They may struggle to pay bills and meet their financial obligations.
2. Emotional impact: Losing a job can be emotionally challenging, and redundancies can create a sense of rejection and failure. This can impact a person's self-esteem and mental health.
3. Career impact: Redundancies can have a long-term impact on a person's career. It may be challenging to find new employment, and the loss of a job can negatively impact a person's resume.

What are the short term impacts on the bottom line?

1. Termination costs: Redundancies typically involve the payment of termination costs. These costs can be significant and can impact the short-term profitability of the business.
2. Reduced productivity: Redundancies can also lead to a decrease in productivity, as remaining people may be demotivated or may need to take on additional responsibilities. This can result in lower output levels and decreased revenue.
3. Disruption to operations: Redundancies can disrupt the normal operations of a business, as remaining people may need to adjust to new roles or responsibilities. This can lead to delays, errors, and other operational inefficiencies that can impact the bottom line.

What are the long term impacts on the bottom line?

1. Talent loss: Redundancies can lead to the loss of talented and experienced people, who may choose to leave the business voluntarily or may be targeted in the redundancy process. This can impact the long-term growth and success of the business, as it may struggle to attract and retain top talent.
2. Reduced innovation: Redundancies can also impact a business's ability to innovate and stay competitive. With fewer people and resources, the business may struggle to develop new products or services or to stay up-to-date with changes in the market.
3. Reputation damage: Redundancies can have a negative impact on a business's reputation, particularly if they are seen as unfair or poorly managed. This can make it more difficult for the business to attract new customers, investors, or employees, and can ultimately impact the bottom line.

What does repeated redundancies say about a business and its leaders?

1. Poor strategic planning: Repeated redundancies may suggest that the business is not effectively planning for the future, and is instead reacting to short-term challenges as they arise. This can indicate poor strategic planning and a lack of foresight on the part of the business leaders.
2. Ineffective cost management: Repeated redundancies may also indicate that the business is struggling to manage its costs effectively. This can be a sign of poor financial management and a lack of long-term planning.
3. Inconsistent decision-making: Repeated redundancies can also suggest that the business leaders are making inconsistent decisions about staffing levels and resource allocation. This can create confusion and uncertainty among people and may damage the trust between leaders and employees.
4. Poor people engagement: Repeated redundancies can have a significant impact on people morale and engagement. If people feel like their jobs are constantly at risk, they may become demotivated and disengaged, leading to reduced productivity and increased turnover rates.
5. Lack of leadership effectiveness: Repeated redundancies may ultimately reflect a lack of effective leadership within the business. Business leaders may be struggling to make the tough decisions needed to steer the business in the right direction and may be failing to inspire and motivate their people.

As already stated redundancies and restructures occur, it is a part of business, yet it is how a company handles redundancies and supports both the remaining people and those who have lost their jobs can say a lot about their values and leadership.

If a company handles redundancies with care and empathy, it can demonstrate that they prioritise their people's well-being.

On the other hand, if a company handles redundancies poorly and without sensitivity, it can damage the company's reputation and hurt morale.

While redundancies and restructures may be necessary, it is important for leaders to consider the potential costs and risks associated with redundancies, and to manage the process carefully to minimise their impact on the bottom line.

Leaders, if they are leaders in more than name approach redundancies with compassion and consideration for those affected.

Is there anything you would add?

Monica Watt | Chief Motivation Officer | Incredible Buzz Coaching and Consulting | www.incrediblebuzz.com | [email protected]

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