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Redundancies, Lay-offs, Restructures – consider the consequences and alternatives
In today’s economic and business environment, we see more and more companies going through staff reduction processes in an effort to save financial resources. Economic decisions are the drivers behind restructures, lay-offs, and redundancies. In a recent article HBR reported the findings of research in how these economic belt-tightening efforts affect the business beyond the short-term savings. https://hbr.org/2024/10/research-the-long-term-costs-of-layoffs?tpcc=orgsocial_edit&utm_campaign=hbr&utm_medium=social&utm_source=linkedin
Layoffs have a massive impact on employee engagement and subsequent business success. “For employees who were present at the time of the layoff, engagement doesn’t return to pre-layoff levels, even after two years.” Remaining employees are left reeling and wondering if they will be next. They may feel betrayed, especially if the redundancies were a total surprise because of poor leadership and lack of transparency. How does a business recover from this turmoil?
The ideal place to start is to thoroughly examine all possible alternatives to restructures and redundancies. There are many alternatives that can not only avoid the above negative impact on the business, but are actually an opportunity to cement and solidify the loyalty, engagement, and trust currently in place. For more information on this, please contact Accent Management Limited for alternatives which will have a positive impact on your organisation. Our consultants will be able to guide you in understanding and navigating the impact of various scenarios on your current business and help you plan the best way to navigate hard fiscal decisions without killing your culture and staff morale.
Below are some key findings from the research:
Employee Experience:
💡 16.9 % drop in company confidence
💡 12.1 % drop in belief in career opportunities
💡 10.5 % drop in confidence in leadership
Impact:
💡 expect 18-24 months for engagement to rebound
💡 expect increased turnover
💡 performance setback – business uncertainty
💡 decreased morale, motivation, loyalty
💡 loss of trust – employees feel employer does not care about them
💡 business reputation and operational sustainability
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2 Comments On “Before you Consider Restructure…”
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Thank you Kol3ktor, that is very kind of you. We aim to transform – our industries, our client organisations, and our lives.