Alternatives to redundancy: the four Rs of managing workforce change
In Japan there is a term called mottainai, which expresses regret when something good is wasted. Environmentalists, who follow the mottainai philosophy, look to the four Rs of Reduce, Reuse, Recycle and Repair in all aspects of life.
In my outplacement work with organisations, I deal with another form of mottainai: a regret over the waste of talent that can occur when companies don’t proactively manage their workforce. When time is tight and with the imperative to cut costs or patch crucial talent gaps, companies often feel they have no choice but to do it reactively – wasting resources, in-house talent and hard-won morale.
Hudson achieves mottainai in the context of managing workforce change by using another principle of four Rs:
You’ve already invested a lot in your people through hiring processes and ongoing development, so it makes sense to retain this knowledge capital in-house by identifying alternative career paths and opportunities for individuals with identified capability and interest within your organisation.
Retraining can be costly, but it instills a learning culture in the organisation, shows the company is committed to its people and their development, lifts morale and boosts an employer’s brand.
Resourcing refers to critically evaluating your candidate pipeline and sourcing strategies to identify the talent required to fulfill key roles. Whilst certain roles may no longer be required in your organisation, or time to retrain is not available, you may need to make some smart hires in other areas to benefit the whole organisation by bringing in new knowledge and experience.
With the rapid pace of change, advances in technology and increasing pressure to run highly efficient and cost-effective organisations, there will inevitably be roles that are no longer required, resulting in redundancy.
When your organisation is undergoing major change, how do you choose between the four Rs, or a combination of the four Rs?
For each option, you will need to weigh up the cost with the benefits – financially as well as other factors such as retained people and knowledge, staff morale and brand protection. Every situation is different, and not all of the four Rs will be applicable in every instance.
Haste makes waste
The shorter the timeline to implement a change, the fewer options available to your organisation. From my experience, when there’s only a short timeframe available, redundancy is usually the main option that organisations consider.
As far as cost-cutting initiatives go, redundancy can be an expensive option, especially if handled poorly. Not only are there severance payments and outplacement costs to consider here, there is also the lost investment from hiring, onboarding and training those people in the first place. There is also lost intellectual property and potentially the impact on an employer’s brand if the redundancy is not managed in a dignified and well executed way. In a worst case scenario this could lead to strikes, negative media coverage and a damaged employer brand. There can also be the negative cost and impact to the morale and motivation of employees that remain in the organisation.
By looking ahead at what changes are facing the business or industry and projecting your talent needs, you’ll have more choices among the four Rs to manage the changes in your workforce.
Is technology making some jobs redundant? Does your organisation need to offshore roles to remain competitive? Future-focused organisations can run targeted training programs to help their employees keep pace with a fast-evolving business environment and be more adaptable to its new demands.
Equipping people to succeed
Redundancy may still be an inevitable outcome but with the foresight to implement early intervention strategies, there can be a drastic reduction in the negative impact of this process. Employees equipped with active and contemporary career transition solutions and strategies will be able to access the job market more readily and smoothly transition into new opportunities.
With enough lead time, you can begin a career transition process with individuals who know their roles are ending. Through the process, they can better understand what transferrable skills they possess, be trained with supplementary new skills and set their sights on industries they can reasonably move into.
While redundancy can still be challenging, most people understand that in their career lifespan they are going to go through a career transition process at some stage, and they can regard the situation in a more positive way if the process is managed well.
In one example, Hudson helped a large government department reduce excess employees across a number of institutions. Our solution involved group workshops for employees to provide information on core transition skills (resume, interviewing technique, using social media, networking), as well as individual coaching sessions and follow-up to build the individual’s career plan and strategy. We also provided ongoing support as they entered the job market.
Over 1000 staff received assistance. Despite a 67% reduction of excess staff, a survey found 90% said that they agreed or strongly agreed that the program was structured and relevant, and felt confident applying it to work and life. Given time and resources, we were able to make the best of a difficult situation.
When time is tight
When organisations come to us seeking help with outplacement, some are already close to the end of the consultation process and require immediate and critical support to implement a career transition program.
However, even in these circumstances, we have had the opportunity to consult and work through the four Rs methodology with our clients to assess if there are other alternatives for impacted employees other than an exit from the organisation.
Of course not every employee has the capability or desire for redeployment or retraining. However, by exploring the four-R methodology, there can be an increase in the options available when making decisions on how best to manage talent within an organisation. Clients have often been surprised that they have had more opportunities within all four Rs than they originally thought.
Like with the concept of mottainai, with a little planning and strategic thinking, organisations can reduce unnecessary loss of talent by incorporating all four Rs when they need to implement workforce change.