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Step by step restructuring Introduction The need to implement change is almost inevitable in today's business environment if organisations are to continue to survive and grow. Change can be in response to a number of factors but will almost certainly lead to a need to restructure the business to some extent. The restructure may be small and only involve a single department or a few employees; on the other hand it may involve the entire workforce who could be spread over different sites and locations or even different countries. Why restructure? As the old saying goes, "if it's not broken why fix it?" However there are numerous reasons why an organisation may need to change. The most common of these are:
Our guide takes you through the main stages of a restructuring exercise and will help you to ensure that:
A successful restructuring exercise depends on a number of factors which include:
If any of these are an issue, do consider carefully before embarking on your restructuring exercise. It is absolutely essential that you have a plan and timescales for each stage of the process. The first step is to agree at senior management level or Board level, if appropriate, the end goal and the vision. This should be aligned with your long-term strategy in terms of operational, financial, marketing and sales needs. Formulate a project plan indicating the timescales for action and the date by which the restructuring needs to be completed. Write a brief for staff setting out the proposals, the reasons for the restructure and the overall implications for the workforce. At this stage it is best to avoid specifics such as the number of people who might be made redundant as this will often cause unnecessary panic. A statement of what you want to achieve and where you want to be in terms of positioning in the market place in a "let's all pull together" philosophy, is the best starting point. Ensure that there is no time delay whereby some staff have not been briefed and others have. This will lead to rumours starting. Staff who are absent for whatever reason should be briefed either by telephone or by a home visit if that is possible. Include in the brief the proposed timescales and your intention to consult with staff at the earliest opportunity. If your organisation is unionised arrange to meet the union representatives as soon as possible, but not before you have completed a draft project plan. If the restructure will mean changes in your organisational and/or departmental structures, changing job roles or scenarios such as more staff in one area and less in another, you will need to plan the proposed new structure before holding any meetings. Draw up an organisation chart and departmental charts (include job titles rather than names). Be sure about why this is necessary in line with the strategic objectives. Also draw up draft job descriptions and person specifications for any new jobs. Identify which, if any, job roles may be 'at risk' of redundancy. Begin the consultation process. You must consult with all affected employees and this must start "in good time" and be meaningful. How you carry out this consultation will depend on the numbers of employees affected and also whether or not you recognise a trade union for this purpose. If twenty or more employees at one establishment are likely to be 'at risk' of redundancy within a 90 day period you will need to consult with either a recognised trade union (if you have one) or elected representatives. If you are re-structuring, all affected employees should be included in the consultation process even if you are confident that you will be able to retain them, albeit in a different role or on different terms and conditions. Ensure that you are properly prepared before you start:
Don't rush the consultation process - this will generally always backfire. And remember that notice must not be given until consultation is exhausted. If you anticipate 20 or more potential dismissals in the space of 90 days you
will also need to notify BIS, either by letter or on a specific
form HR1,
which can also be obtained from any Redundancy Payments Office.
Until you send this off, your 30 (or 90) day consultation period is not triggered.
See our step by step guide to redundancy If your organisation is not unionised and 20+ employees are likely to be 'at risk' of redundancy, you will need to consult with employee representatives. Therefore you will need to arrange for staff to nominate their representatives within departmental/location areas. If more than one person is nominated, an election must take place before consultation can commence. Advise staff of the details of the proposed structure, any new job roles that are available and which job roles may disappear. Ensure that all staff receive the same message indicating how the new job roles will be advertised and how staff can apply. Note that any staff whose job roles are disappearing and therefore will be 'at risk' of redundancy should be given first consideration for a new post. This does not mean that they have to be appointed if they are not suitable for the position. Carry out a thorough recruitment selection procedure for the new roles. Even if there is only one candidate for a particular vacancy, you must still rigorously test out his/her ability. Remember that those members of staff who are not successful will still be
potentially 'at risk' of redundancy and you must be able to prove categorically
that the members of staff who were chosen for the new roles were the best
people for the jobs and were selected in a fair and consistent manner. You may
wish to consider running an assessment day Once you have made appointments to the new roles, resolve with those staff who are successful in gaining new jobs when they should take up their appointments and what training (if any) is needed. Identify any vacancies that are not filled and also the staff that are still 'at risk' of redundancy. Consider whether any member of staff who is still 'at risk' could possibly be retrained to fill any vacancy. You should consider all 'at risk' employees at this stage through a consultation process. Do not advertise these vacancies externally until consultation has ended and all other options explored for the 'at risk' members of staff. Inform the affected staff that you intend to advertise the vacancies externally having ensured that either they do not wish to apply or they are clearly unsuitable (you must have evidence of this). Continue consultation both with employee representatives and with individuals until the end of the consultation period. Ensure that you explore all options before issuing redundancy notices. Once you have completed consultation, if you have not been able to offer any suitable alternative employment, issue redundancy notices to those not successful. Consider whether you wish them to work out their notice, or to give pay in lieu (sometimes the existence of staff who are losing their jobs can jeopardise the introduction of the new structure; at other times they can be invaluable in assisting with the transition as they keep the "old" process going for as long as necessary). If you still have unfilled vacancies, recruit additional staff externally if appropriate so that your new organisational structure is complete. Ensure that you evaluate and monitor the success of the restructure in terms
of operational efficiency, financial stability, increased market share,
competitiveness and sales. Get your managers to evaluate employee
engagement post-restructure, addressing any concerns that employees may have.
Read our guide to managing redundancy survivor syndrome Hold a final briefing with elected representatives/union to confirm their commitment to the organisation and to the new structure. Restructures can be very complex and time consuming processes that cause both managers and employees a lot of stress. However, managed properly and fairly, a restructure can lead to greater opportunities for staff, greater profitability for the organisation and, in the long term, a happier workforce. The key is always to plan properly, listen to your employees and remember to communicate, communicate, communicate! |
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