Manage retrenchment professionally- avoid backlash
Human capital is often an organisation’s greatest asset and its primary competitive differentiator. However, human capital is frequently the prime target when organisations reduce costs.The management of staff retrenchment often plays a critical role in demonstrating an organisation’s values and protecting its reputation. It is vital that the retrenchment of staff is managed proactively and responsibly to ensure sustained staff competence and capacity.
Retrenchment has an immense emotional impact on employees at all levels within the organisation. Executives who assume that employees will continue to give their all to the business following a retrenchment announcement may be in for a rude awakening. If the retrenchment process is not appropriately managed, discontent and demotivation are likely to spread like viruses through the organisation, and the impact on both the corporation and its employees (those losing their jobs as well as those remaining) can be devastating.
The resulting disappointment, anger, upset, resentment, and ill-feeling may precipitate lower productivity levels, turf battles, poor morale, heightened interpersonal conflict, poor time management, increased absenteeism, cynicism about the corporation’s future, and even incidents of sabotage.
Often neglected and forgotten in the retrenchment process are the “reorganisational survivors” who are inevitably forced into a ‘do-more-with-less’ situation. After massive downsizing exercises, it’s sometimes hard to tell who is less fortunate – employees who have had to leave, or those who are left behind (commonly termed ‘the working wounded’). Not only are the surviving employees troubled by guilt, an ambivalent attitude towards management, and fear of future retrenchment, but also by the burden of job enlargement, the loss of experience and expertise, and the need to adjust to a new organisational structure. If executives expect surviving employees to give of their best, they need to provide a very tangible message of investment in the future of the company and in its remaining employees.
The responsibility for ensuring that this process is effectively implemented rests largely on the shoulders of senior management who must acquire the skills to negotiate organisational change effectively, the ability to deal with all relevant stakeholders and the drive to lead their staff successfully through this transition. Only motivated, effective and well-informed leadership can meet the enormous challenges posed by the retrenchment of staff.
However compelling the retrenchment plan may look on paper, it becomes a reality only when it is accepted and implemented by those who have to manage and operate the new processes.
How to handle retrenchment and ensure continued improvement in the company and its various divisions
Many retrenchment scenarios provide an excellent opportunity to let go of old policies, practices and sacred cows that may have contributed to the need for downsizing.
Plan appropriately for the process through a programme of manager training, union education and employee support. Mount coaching and training programmes aimed at minimising the negative impact of the retrenchment process on the organisation and maximise business continuity and organisational renewal.
Managers often need help to master their own emotions. Improving a manager’s ability to deal with the process effectively, at a personal as well as an organisational level, is likely to maximise the probability of successful implementation.
Managers need to develop the personal and technical skills to deal with the anger, questions, disappointments, defiance and difficulties of their staff.
During the retrenchment exercise, it is vital for a corporation to affirm, in practice, the importance of its employees. This can be expressed through considerate treatment of those who are leaving and through a renewed commitment to those who remain. Providing support for those employees due to be retrenched demonstrates the organisation’s commitment to fair employment practices and its willingness to take responsibility for its actions.
Intervention programmes should be geared to assist organisations, their managers, and their retrenchees to counteract the negative effects of retrenchment. A process of group workshops, individual coaching, and management mentoring helps to facilitate an acceptance of the process; the mobilisation of effective coping resources; the development of self-confidence and motivation; continued commitment to productive employment and an ability to make informed decisions about the future.
