In this case study on Redundancy we answer the question
– Is it possible to make redundancy more human?
As people start to love working in a mwah. way, there are so many cases coming back to us, and we’re really enjoying sharing them with you. We see them as an antidote to cynicism.
The issue of redundancy is another one we are routinely asked about.
Context on Redundancy
Businesses are always evolving, and unfortunately, this sometimes means that individuals and even whole teams, may not fit into the context, structures, and operations of organisations forever.
Good organisations plan forward and try to manage the changing shape of their workforce with training, recruitment, and usually natural attrition, but when change comes faster than planned, or unexpectedly in response to competition, then the plan is not evolution, but rather some type of restructure and rapid change.
In times where roles become redundant and employees are faced with losing their job, our clients ask us if it is possible to manage these situations in a human way that keeps everyone whole?
The answer to this question is yes, but it’s not an easy yes. It is one that takes thoughtful planning, courage, respect and some investment to get right.
And while these types of experiences will almost always be challenging and even emotional for those involved, there is a way to manage redundancies well and in a way, that not only keeps people whole but may even add to their capability and confidence.
The Case Study on Redundancy
A large company, a cost decision was made to outsource a key sales administration function. Impacting hundreds of employees globally, a decision was made to roll out this change in ‘waves’ based on geographic regions, to reduce risk and also make sure people could be well cared for as the changes were made.
The focus of this case study is the Australian team within the company, where the Sales Admin function of 40 strong employees, had been allocated to the third ‘outsource wave’, 18+ months from when the case study context begins.
The outsourcing arrangement and remaining team structures would mean almost all roles within the Sales Admin function would be redundant and that most employees within this team would, as a result, leave the company.
Getting the base principles right
In most cases we hear about, the decision to make an individual or team redundant generally comes quite quickly and as a shock. An unexpected meeting on Monday letting you know your job ‘is at risk’. A few days of ‘consultation’.
Then a final letter on Thursday with some payout figures and an invitation to your own farewell party at the end of the following day (once you have packed up your desk of course). Within a week you have gone from an often long-established status quo to losing your job, with your head spinning all the way.
For some, this timeline is even more condensed, with the whole process happening in a day or even one afternoon.
General Experience on Types of Redundancy
While this may be the general experience on individuals/teams on the receiving end of redundancy news, in most medium-to-large sized businesses, these decisions are being made over weeks, if not many months. Business cases, severance payment accruals, comms plans, and legal advice are mostly done well in advance, with a ‘sensible date’ close to the actual change identified as a notification day.
The focus becomes purely about managing potential or perceived company risk (commercial, legal, operational, customer and reputational), with a mostly cursory consideration on supporting people through the exit process (usually legally based with some severance, and as an extra benefit, throwing in an off the shelf outplacement package and a goodbye gift).
In this case study however, the business leaders committed early on to take a completely different approach, and set base principles always starting with ‘doing what’s right’ and demonstrating this (and allowing the team to reciprocate the same principle) by being transparent, showing trust, providing genuine support and genuinely involving the team.
In short, they were determined to respect the employees and their difficult situation, by ensuring that as much as possible was done to enhance their future employment prospects and security.
These clear principles about the approach to be taken allowed decision-making and planning for the change to be built on a solid foundation of respect and care.
When do you we tell the team about outsourcing and the likely impact on their jobs?
Do we tell them 18 months out (giving them a chance to understand the decision, make informed decisions and then plan their exit in a way that is great for them personally and for the business), or do we bunker down and keep quiet until closer the time to minimise the risk of the team leaving while we still need them, poor performance and/or low engagement?
The decision was easy.
Instead of offsetting the potential risks associated with expecting the worst in people, the leaders consciously decided to take a more balanced approach and understood that if they expected the best in people, that the vast majority of people would rise to the occasion.
Starting with honesty and courage
The Company leaders organised a meeting to tell the team. The CEO, Head of Sales and Line Leaders came out to the team’s home site and openly and honestly shared what was happening.
They were clear on the company decision, the likely impact on the team, and when asked questions they did not know, they were honest about this but committed to coming back with the answers quickly.
While the team was sad at the prospect of losing their jobs, the Leaders were surprised that most of the questions from the group were about ensuring their customers continued to have a great experience and ensuring the outsourcing arrangement would not damage the great relationships they had built over time.
At the end of the session, the leadership team asked the group to reflect on the support they really needed and committed to ongoing clear communication with the group.
While the group was still unpacking the possibilities and personal impacts in their heads, they were confident they would have many opportunities for their questions to be answered as they arose.
Providing real support
When the leaders offered support, they meant it. Instead of just rolling out the standard options, they genuinely asked the team what they felt they needed. And the team were honest and fair.
They wanted support to understand how they were feeling, how to manage their emotions and support each other (done – they ran a series of really good, small group workshops to help the team understand change, grief and how to support one another at work, and they sought feedback from the team to be sure about the quality).
They wanted to know what jobs their skills could be a match for both within and outside of the company and what capabilities they needed to build (done – they connected the team with Leaders across the business and connected the team with great recruiters to help them better understand the external market).
They wanted personal support (done – they upped individual access to the EAP provider, ensuring a unique support offer for this team).
They wanted to be a key partner in planning the change and the impact on them (done – and this proved really valuable to the business too, as the team really cared about the customers).
What the team wanted was simple, cost-effective and realistic. They felt heard and valued because the company delivered on what they were seeking.
Getting the team involved and showing trust
The leaders lived up to their commitment and shared change plans openly and got the team involved in both designing and executing what was required. Customer communication, process documentation, system migration, knowledge transfer, and key dates were all developed and delivered by the team.
The team also decided amongst themselves that they ‘wanted to leave a legacy’ and be the best Sales Admin function the business has ever seen (and set a high benchmark for the new outsource arrangement).
While the Leaders showed complete ongoing trust in the team, a very small number of instances of bad behaviour and performance were still called out and discussed. Values and required behaviours remained a priority. These expectations were clear to the team and were almost always delivered by almost every person in the team.
Living the commitment
In the months between the announcement and the outsourcing going live, Leaders delivered on their commitments to the team. Without exception.
They regularly provided updates, answered difficult questions, took feedback and ensured they were visible and available to the team. They even took the tougher feedback on the chin when people were having a bad day or feeling angry about the decision.
They also celebrated the team’s successes along the way and provided additional support and sponsorship around the things that mattered most.
What was the result?
In the period between sharing the news and the team leaving the business, they surprised even the most optimistic of Leaders (and seasoned of HR folk like myself);
- The team’s engagement level continued to increase (and were some of the highest in the business in the formal engagement survey results during this period)
- The team delivered on their ambition to ‘leave a legacy’ and consistently exceeded their internal KPI’s, plus entered and won two external industry awards
- Absenteeism of the team went down
- 80% of the team members stayed until the outsource arrangement went live (even though this occurred 6 months behind schedule), and those who left early were honest and transparent about their decision and even helped with handover planning
A few of the ‘personal’ stories post the outsourcing that stick out include;
- A few members of the team retired, after having a good chunk of time to receive great financial advice and plan their last year of work
- Other individuals decided to take career breaks (and a few even ended up travelling around Europe together for 6 months)
- A number of the team re-skilled and took other jobs within the company
- Other members of the team undertook external study and started new careers outside of the business (personal trainers, child care workers and even a writer)
- Within 6 weeks of leaving the business, every member of the team who was looking for employment had found a new role
While this may sound slightly nirvana-ish, especially if you’ve only seen it done badly, this is a true recount of what actually happened.
Sure there were some tough moments and difficult conversations and the moments of suboptimal performance, however, on the whole, the decision of the Leaders to ‘do the right thing’ and trust and expect the best in people, delivered the best possible result for both the individuals and the business overall.
Costs were managed. Risks were managed. Relationships and reputations were even strengthened. Simply by being human.