Management Consultant Mike Eldon

Involve staff in layoff plan to ease feelings

In the last few months I have come across numerous examples of employees who, as a result of a planned restructuring of the organisation in which they work, feel they will be losing out.

They expect to suffer from woes such as diminished seniority, influence, control and prestige — even redundancy, while more practically also worrying about reduced earnings and cramped career prospects.

Why does restructuring occur? It can be because of new market circumstances or technology requirements, and so the need for different skills and attitudes; it can flow from mergers and acquisitions, or just from new leaders with different preferences (hopefully not simply wanting to make their presence felt or to fill key positions with loyalists).

These upheavals can result in a wider or narrower geographical presence, increased or reduced staff numbers, and many other consequences too, all tumbling around together. Then, the larger an organisation becomes the greater the need for multiple reporting relationships within intricate matrix structures; and also for temporary work groups that can respond with agility to new opportunities and challenges.

Inevitably, salary structures and incentive schemes must be revised to align with these changes.

So much volatility, uncertainty, complexity and ambiguity: the VUCA thing! No wonder it leaves many perplexed and frustrated. While the fear of impending loss may be misplaced, either way how the people feel is real, and for some the loss may indeed be significant. So like with the loss of loved ones, they will journey through the well-defined stages of grieving: from denial to acceptance to mourning… and hopefully to eventual healing.

People react differently when dealing with loss. Demoralised and demotivated, some may withdraw, perhaps sulk, but not always obviously. The angry and aggressive will resist the new situation, fight back, protest, perhaps sabotage it and disrupt those around them, suppliers and others. Others will rise to the occasion, go with the flow and become reluctant heroes to their bosses and others.

So how can one overcome people’s feelings of loss? How can they be helped to come to terms with it, sacrificing their immediate wellbeing? And how can their bosses and colleagues work with them to mitigate the consequences of these losses? Do they show sympathy? Offer support?

The first requirement from their superiors is to recognise that in any reshuffle there are likely to be losers. Identify who they are, and accept the reality of how they feel. Then find ways of comforting and compensating them.

One company with which I am familiar is planning a restructuring thanks to the ongoing growth of its branch network, and is doing so in a highly participative way. As part of a strategy review meeting of the board and top management, those leading the teams whose jobs will be affected were tasked with proposing how the new structure may look. Brainstorming followed at the meeting, in which the pros and cons of the alternatives were assessed and consensus built around one.

In another organisation I have also been impressed by the leaders, who inspired many of their people to make short-term sacrifices in order to strengthen their personal longer-term prospects while building a more robust future for the whole entity.

The “losers” who perform most nobly today will be duly rewarded in the rosier times ahead, while graceless grumblers will either drop out or be asked to leave.

Much of the stress that accompanies restructuring is caused by a transfer of sales prospects from one part of a company to another. For example, larger projects may be moved to specialised head-office functions, with those in branch offices losing out. So can the branch people still play a role, benefiting from at least a share of such revenues and of the accompanying bonuses?

So my plea is simple. Not because a leader should be “nice”, but in order to keep the workforce together as a cohesive and motivated team, do consider ways of reaching an adequacy of win-win – particularly for those who would otherwise become unhappy and thus less productive losers.

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