We live in an information age where restructures and redundancies become news headlines when handled incorrectly. We provide the following redundancy disaster stories and offer suggestions for alternative methods of communicating redundancies to employees successfully.
- In November 2008 HSBC cut 450 jobs in Asia. The Hong Kong staff learned that they were losing their jobs by email.
- In January 2009, the IBM chief reported strong quarterly profits and in an email addressed to employees stated that, while other companies were cutting back, his would not. “Most importantly, we will invest in our people”, he wrote. The next day more than 1,400 employees in IBM’s sales and distribution division were told that their jobs would be eliminated in a month. More cuts followed and IBM laid off more than 4,600 North American workers.
- Employees with an international law firm received an email requesting their presence in the conference room. There they were advised that the firm was going to have to let some of them go. The employees were then told to return to their office and if they received a phone call within 20 minutes, they were being laid off.
Over-communication is impossible during restructuring
Conveying the reasons for an organisational change is critical. Employees want to understand the business reason for the job losses, and how the change will be managed. Breaks in communication are worrying for employees and can lead to rumours. Equally, attempts to deny the reality of the change and its effects on employees are seen as insensitive. Communication must be honest in dealing with the negative feelings of employees. It is also important to communicate throughout the period of change, not just at the beginning or the end.
Your organisation and leaders risk losing credibility and trust if important aspects of the restructure are hidden…. Which directly impacts on employee engagement.
Gallup research has found that where employees trust their leadership, there is a more than 50% chance that they'll be engaged. Where they don't, that figure drops to one in twelve.
- Begin communication early
Change tends to be resisted—especially when it impacts on jobs. But delaying communication significantly increases resistance. The idea is to begin to communicate when you start planning. Delay, even more than the bad news itself, turns employees against the change.
It is better to communicate early – when people expect and can tolerate an imprecise plan with uncertain information - than to make employees wait until you have a polished plan as this can be perceived as dishonesty.
- For big change, think small communication
Small communication is short, informal and face-to-face between managers and their employees. Research has shown us that this is how people want their communication. Good communication has been shown to reduce the failure rates of major changes in companies.
The more formal the communication, the more likely it will fail. Avoid brochures, web pages, and companywide emails and meetings. Employees don’t count this as true communication. Instead, equip managers to speak with their employees face-to-face.
- Talk with people face to face
Face-to-face is the most used, effective, trusted and quickest channel for announcing information, particularly in large organisations.
Manager communication has been shown to be 4-9 times more powerful than companywide communication. In times of stress people look to their immediate managers with questions: Whether they will keep their job? If their job will change? Where the job may be? Who they may report to? These are the most important topics in anyone’s professional life. Face-to-face communication is a sign of respect for the employee and these important topics.
- Communicate possible outcomes - without formality
Typically, employees do not care about good intentions, methodology or assurances that everything will be ok.
For example, to say “There is a 70% chance the business unit will close within 30 days. There is a 30% chance it will continue to operate for 1 year with gradual retrenchments. It is unlikely that anyone will be redeployed” is much better than a brochure encouraging employees to “embrace change.”
The biggest mistakes organisations make with this kind of announcement is too much formality, jargon or false cheer.
Whilst it is widely accepted that employees are looking to reduce uncertainty during organisational change, we believe that uncertainty is some situations can actually be a positive for your employees. To understand why, read our blog post here!
- Don’t make promises you may not be able to keep
Don’t tell employees this round of cuts will be all that’s needed if there is the possibility of more redundancies in the future. Also, don’t be specific if you can’t be. If you promise that the layoffs will be over on by the end of August but they continue for three weeks after that, management and HR will lose credibility with employees.
- Plan logistics
Practical arrangements and logistics should be planned to support the exiting employees on announcement day and minimise the impact on the immediate team and the rest of the organisation.
This could include:
- Organising a Career Transition consultant(s) to be onsite at least 30 minutes prior to the meeting
- Having rooms available adjacent to where the termination meeting is to take place where the affected individual can meet with the Career Transition consultant immediately after notification
- Preparing all paperwork and checking it thoroughly
- Having any additional support people on standby if required
- Dignity: Dignity is the key word - your role as a HR professional or leader is to question every message to ensure that each conveys as much dignity as possible.
- United communications: As IBM learned in the case above, ensure that internal and external communications are united, particularly when releasing information and communicating key messages to staff and the public.
- Beware social media: With the ever-growing use of social media, it’s important to remember that the world is watching. Employees can blog or tweet about the good or bad experiences they went through.
- Manage rumours and gossip: Engage with the background talk. These are the informal conversations of change that can manifest in gossip, rumour, and ‘watercooler’ catch-ups that end up on social media. Acknowledging the rumours allows clarification of incorrect information, whilst potentially providing some very useful feedback.
Comment below on your experiences with (good and bad) communication when managing a restructure.