The people challenge of ‘right-sizing’ your business

In our latest ‘Directors Development’ series, Operating Partner Tom Robinson and Employment Partner Rebecca Ireland discussed the challenges of ‘right-sizing’ your business. Here are our key takeaways:

Does your business have the “capacity and/or capability” to perform the Rightsizing alongside the day-job?

We’re using the term rightsizing to mean making sure that the business has the optimum number of employees, with the right skills and in the right roles, to deliver its vision and objectives and achieve the business plan.

Some organisations have the infrastructure to make changes themselves, for others, extra support will be invaluable.

Undertake a thorough objective review

“One size fits nobody” – just because something works in one business doesn’t mean to say it will work in another. Rightsizing for one business may well be wrong sizing for another. Performing an objective review for the specific circumstances facing a business is absolutely vital.

Test the analysis with key staff – ideally have a “project team”

Engage HR and ideally your legal advisor early – and don’t leave HR wondering what is going on.  The HR team is not just operational.  Involve them at the strategic planning stage.  It is important to plan so you can assess legal and other risks before pressing “go”.

Ensure leaders “own” the proposals

The more people who feel they have been involved in the process the more engaged they will feel in the outcomes. A high degree of collaboration will lead to developing trust and will build ownership of the proposals and the subsequent taking of responsibility for the outcomes.

Consider the most suitable approach for your business – Redundancy / Restructure / Performance Management

Consider every available approach. Should you be insourcing or outsourcing elements of your business activities? Can you withdraw job offers and restrict recruitment? Consider how you are using agency workers. Would anyone be interested in early retirement?

Follow a fair process

There are lots of elements constituting a fair process, and specialist advice should always be sought. However, on a broad level, you must ensure that you:

• Ensure a collective consultation process, depending on the number of redundancies being made.
• You will need to elect employee representatives if you don’t recognise a trade union or have an elected employee representative body already. 
• A fair process involves individual consultation even if there was collective consultation, so this must be built into the timetable.
• Start consultation as soon as possible so that you are not accused of presenting a fait d’accomplit, rather than a proposal.
• Listen and consider suggestions.  If you reject them, have a good business rationale for doing so.
• If redundancy notice is given, an employee has the right to take reasonable time off during working hours to look for another job or arrange training for future employment.

Respect the casualties and support the survivors

Make the experience as human and painless as possible for the affected employees, managers and “survivors”.  This should minimise gossip and the “Glass Doors” and/or Facebook effect.

If you have Trade Unions or elected employee reps, engage with them. If the consultation process is conducted effectively, it can boost employee engagement and protect your brand.   Those employees who are not currently adversely affected by the rightsizing see that their colleagues are being treated fairly are more likely to commit to the business rather than look for another job.

Use the Job Retention Scheme to benefit employees and the company

CJRS will end on 31st October, so employers are currently assessing what this means for their businesses and for their employees. Employers can make those who are on furlough redundant, and HMRC has clarified that employers can still claim in respect of all aspects of the employee’s notice pay.  However, you should not make the fact an employee has been furloughed part of the selection criteria, especially if there are others carrying out the same role who weren’t furloughed.  Before you press go on redundancies, could you make effective use of flexi-furlough – ie. bring employees back part time – or would that simply be delaying the inevitable?

Communicate, communicate, communicate…

Use as many communication channels as possible to inform remaining staff what’s going on and what the future looks like.

You can watch the full webinarhere.

Sign up to our next webinar in the ‘Directors Development’ series, ‘Understanding how to drive efficiency savings and productivity in your business’