redundancies – an unexpected reality for many employers

When an economy is experiencing a slight decline or downturn, restructures and redundancies will always gain greater attention. But restructuring can take place at any time in a business’ life cycle – due to loss in business, reduced profits, a directive from global head office, new management or the merging of two or more businesses.

While making someone’s position redundant is a tough management decision, it will always have the greatest impact on the employee. Yet it is up to the employer to handle the situation in the most appropriate and considerate manner, so that the employee can move on quickly and find new employment, feeling that the organisation they are leaving treated them with respect.

Twenty one percent of businesses plan to reduce their headcount in 2009 according to Randstad’s 2009 Employment Trends Report, and with unemployment reaching almost 6% in Australia, all businesses, both large and small, need to be well prepared to handle redundancies.

Speak with anyone who has been retrenched and more often than not, they will tell you about a terrible experience they had with the way it was handled. This can have a detrimental impact on the organisation’s reputation.

There are plenty of managers who are tasked with giving someone the news, who may have had to do this before and assume they know the best way to communicate it. They also assume the person being retrenched will be ‘just fine’. But no one can predict how someone will react to the news of redundancy. For some it might be a shock, but often their initial reaction masks their true feelings. For others who react badly at first, they may then look more positively on the situation after they have had time to reflect. A few may even be delighted by the news and the opportunity for change, taking it as the ideal time to travel and pay off bills with their redundancy package.

It is important that managers prepare for these different reactions and the myriad of combinations which can occur. A script can be a useful place to start. Planning out what to say and how to answer possible questions can be a useful guide and help prevent managers entering the meeting unprepared. It’s also important for those making restructure decisions to take advice from colleagues who may have experienced this before. Checking what worked and what didn’t, managers can prepare in the best possible way.  

It’s likely the manager informing the employee might become nervous. Making someone’s position redundant is not pleasant and it’s not a comfortable situation for anyone. Managers could expect to feel nervous before, and rotten afterwards. To help, managers should always have someone on site on the day – an outplacement consultant, HR manager or business coach – who can provide support to the person giving the news, as well as the person receiving the news.

Managers need to remember the issue of redundancy is not confined to the meeting where the news is given to the employee. An employee may initially take the news well but could soon become overwhelmed once the meeting has finished. They may suddenly feel that they don’t know what to do next, where to start, what to think, and they need assistance coping with the news. The manager, on the other hand, can be oblivious to this, leaving the room feeling things had gone well.

Managers must not see the meeting as a one-off. They need to follow up to check how an employee is feeling and offer advice and support to the employee on the day and for some time after they have received the news. At its most basic level this should include follow up meetings with the employee to monitor their feelings and to offer advice and support. Managers should also make themselves available at other times in case the employee needs to speak to them for advice.

The use of an outplacement service can also be beneficial at this stage. Currently 53% of businesses in Australia use an outplacement service, which provides advice to managers on how to deliver the message – what to say, what not to say, how to say it – and can provide support, advice and consultation for those being retrenched. Through consultations with interim management and career transition coaches, outgoing employees can maximise their career opportunities and plan their career for the next six months to two years and beyond.

The benefits of offering outplacement services are not just felt by the person being retrenched - there are benefits for all parties – the manager, the organisation, the employee and the remaining employees. By offering career transition coaching, the organisation demonstrates to employees that whilst they had to make a commercial decision, they do look after their employees. It can show staff who remain that their colleagues were supported and the outcome was positive. This can help generate loyalty and understanding amongst staff, which translates into a range of positive benefits for the business.

Whilst a manager can prepare themselves for communicating a redundancy, it can often be a great shock for the employee. So how can someone who is retrenched prepare, and what steps can they take to ensure the next stage of their career is a success?

For some, being retrenched may not come as a great surprise. If the organisation is going through a difficult period and other colleagues are leaving, employees can take steps to prepare themselves for the news. By updating their resume, keeping an eye on the current job market and discussing opportunities with recruitment consultants, employees can place themselves one step ahead of the news. Building and maintaining networks is important at this stage.

But for many it can be a great shock. It can be frightening, disheartening and a very stressful experience. How an employee reacts in the first few hours and days can have a significant impact on their career for years to come.

Firstly, employees need to understand and accept the redundancy. What is important for all employees to remember is that when hearing the bad news, it’s the position that is being made redundant and not the employee. However the employee is the one that will still have to cope with the consequences.

In the meeting, employees should ask as many questions as possible about the redundancy package and the services on offer to them. Employees need to understand the rights they have under their contract, the redundancy package they are entitled to and what services are on offer to them to help them get back on their feet. Whilst an employee may feel anger, betrayal and resentment towards the organisation they should grasp the offers of advice given to them. If an outplacement service is being offered, employees should access this service and the tools available to them, soon after hearing the news. By drawing on the expert advice of consultants and accessing the wealth of career advice available, employees can quickly place themselves in a positive position to go out and secure their next job.

It may seem an impossible task at the time, but when leaving the meeting, the key for employees is to stay motivated and to take positive steps to get back onto the path of employment.

Making the most out of contacts, keeping informed about the job market and registering with recruitment consultants will help the employee hear about any suitable vacancies. Employees need to be proactive in their job hunt. Many jobs are not advertised so making direct applications to organisations may also open important doors. The hidden job market is where many people find their next role.

Being retrenched may also present many employees with the opportunity to make a career change. It may be the ideal time to venture into an industry they’ve always wanted to work in but never had the time to try. Making this industry change is often more successful if the skills and experience is easily transferable.

Above all, employees should focus their minds on seeing this as an opportunity to control the next chapter of their career. An employee sitting in a meeting room being retrenched may feel their future looks bleak, but in fact, it can be one of the best things that could ever happen to them, rejuvenating them and their careers. It’s often with the benefit of hindsight that people realise that.


For further articles and advice on employer branding, strategic talent management, employment trends and employee engagement and retention, visit Randstad's knowledge centre workforce360 today.

about the author

Megan Bidencope - National Director, Randstad HR Consulting

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