By Bridget Hogg – Outplacement Adelaide a brand of Development at Work Australia
Is there a downturn in your industry? Is there a reason to think your organisation may be out of business soon or unable to stay afloat? Might there be redundancies or job losses?
This blog is for you. There are some strategies that will keep you out of hot water when planning and managing redundancies. The first sensible step is to see what’s coming on the horizon early and make a plan using specialist expertise and advice. If you think you might have to plan for redundancies then talk to an outplacement services provider about what support can be provided for those giving the news and those directly impacted – well in advance.
Smart organisations train their managers in how to anticipate and understand reactions to change and redundancies. These managers are then in a better position to manage their own reactions to change and to be able to manage the reactions of their team and colleagues effectively. Untrained managers can react, add fuel to the fire and exacerbate fear and anxiety – instead of de-escalating big emotions.
Great organisations offer individual or group-based outplacement support to those in the roles that were made redundant. Consult with an outplacement provider to get clear on what services they can offer (including on-site on the day support for all). Find out about options and costs and be clear on your priorities. Are you seeking a quality service with tailored and enhanced psychological support or a cost effective “resume helper”?
If you think your organisation may be heading towards administration and you won’t have the budget for outplacement for a free factsheet about the free government support that could be available to help your employees.
As an outplacement consultant I work with organisations that are planning to make positions redundant. I work with leaders making the decisions – and employees who have been offered re-deployment or retrenchment. Sometimes I work with businesses who go into receivership.
This is what I know about mindsets and emotional states at times of redundancy and business failure
- Everyone is impacted – those who stay, those who have to leave, those giving the news and making the decisions. Emotional states are fluctuating and stress is often high. Leaders feel anxious and often guilty; those not being asked to leave feel sad and often feel guilty that they “survived the cut”; those who are asked to consider re-deployment or redundancy are often shocked, angry – and fearful.
- Great leaders manage their own mindset and emotions and lead the mindset and emotional experience of others. Helping people to keep on an even keel and to see what upside there could be is a great skill.
- Leaders sometimes “fail”. Businesses go into administration. It can feel like chaos and there can be a lot of guilt. At times like this – everyone, especially leaders, need our support.
Psychosocial safety is a critical workplace health and safety obligation during redundancy processes, with regulators now having the power to intervene if a process is managed in a way that creates a risk of psychological harm. Employers must proactively manage the risks of psychological injury for all employees—both those being made redundant and those who remain.
What will keep you out of hot water?
- Do what you are legally obliged to do (consult, redeployee, calculate and pay the correct redundancy pay)
- Proactively seek to support all your employees and keep them in a job – provide outplacement support and onsite on the day support for all
- Ensure you do not create psychological harm
Redundancy can create several psychosocial hazards and cause psychological harm. These risks can affect the mental well-being of all employees involved.
For employees, the hazards include:
- Job insecurity and uncertainty and anxiety about “who is next?”
- Guilt that they were “one of the lucky ones” who missed the cut.
- Poor or rushed communication and shock about the news
- A lack of support (obviously this will be mediated by the outplacement consultant that you choose to work with your people – but don’t neglect managers and those staying who may feel shock, guilt and feel angry that the organisation “abandoned” their colleagues)
- Stress of choosing re-deployment or not (often in a short time frame)
- Increased workload: Are some of the responsibilities from the redundant positions going to be taken on by remaining staff, leading to job overload and burnout?
- Poor communication and support: Leaders can feel stressed about talking about what’s happened and the realities of what may be to come and, as a result, employees may feel stressed, worried they have to “compete” with their colleagues to stay – resulting in fractured workplace relationships and low morale.
What can employers do to manage psychosocial safety during redundancy?
To protect workers and manage legal and reputational risks, employers should integrate psychosocial safety measures into all operations. To integrate psychosocial safety into your redundancy process it helps if you start well before redundancies are thought about with your ongoing daily practices.
Here are some ideas.
Before the redundancy process
- Build a culture of safety: Prioritise psychological safety by creating an environment of open communication and trust.
- Train leaders: Equip leaders with the skills to: understand and manage their own emotional state and mindset; understand how people react during times of change and transition; and have difficult conversations and manage sensitive situations with empathy and respect.
Ask your outplacement consultant to help you with such training.
During the redundancy process
Focus on clear communication, two-way communication and discussion, providing clarity and choices, compass and continuously checking how people are going.
- Strategic planning:
- Identify and assess psychosocial risks specific to the impending redundancy.
- Plan for extended consultation timelines to allow for meaningful input and adjustment. You especially will need to give people time to consider re-deployment options which you must offer if there are any available.
- Proactive consultation:
- Inform employees of the organisation’s position and the reasons for the change to reduce uncertainty.
- Provide forums for affected employees to ask questions and receive clear, timely feedback.
- Compassion:
- Deliver news with empathy, respect, and clear information about next steps.
- Provide support services, such as Employee Assistance Programs (EAP) and Outplacement Services.
- Post-process support:
- Provide outplacement services which support individuals psychologically and with their career transition. Provide written references and any specific additional information you may have about government support for your ex-employees.
- Share information as transparently as you can with remaining employees about the reasons for the restructure and if there will be no further redundancies, to quell anxiety. Provide confidential psychological support such as EAP counselling where necessary.
- Assess and manage the workloads of remaining employees to prevent burnout.
- Create and maintain detailed records of the steps taken to assess and address psychosocial risks.
The legal implications of ignoring psychosocial safety
Work health and safety (WHS) laws across Australia now treat psychological health risks with the same gravity as physical risks. Ignoring these obligations can result in serious consequences for employers including stop work orders, claims for workers compensation and reputational damage if a poorly managed redundancy results in bad press and others leaving.
Do you have the tools to manage your own mindset when things are tough? Do you manage your emotional experience? Can you influence the emotional experience of others around you?
The essence of leadership is thought leadership and state management
Leaders sometimes experience “failure” and often experience challenge.
I work with leaders who have to plan for unwanted change, including downsizing, redundancies and even entering into receivership. What makes a true leader at a time like this? It’s how they manage their mindset – and the mindsets of those around them who are directly impacted. Leadership starts with mindset and state – managing your own emotional state in difficult times is difficult, great leaders also lead the emotional state and mindset of those around them. When leaders around you seem to “fail” – that’s the time to be supportive, to help them to manage their emotional experience and thoughts.
Conclusions
1 To be a powerful leader you need to be able to manage your mindset and emotional state.
2 To have influence, leaders will influence others’ emotional states and mindsets
3 When managing redundancies plan ahead, obtain advice, consult with experts well in advance, involve lawyers and outplacement consultants, train your leaders, provide consultation, provide and seek out opportunities for redeployment, provide support throughout the decision-making process to those who may be retrenched or redeployed and support for all involved (including a debriefing for managers who had to give the news). The law reminds leaders that they must take care to prevent psychosocial risks at work – including at times of redundancy – think about how best to support your people.
4 Finally remember, leaders who may feel they have “failed” need our support.
For more on stop work orders related to redundancy and psychological risk see:
For information about:
- outplacement services
- government support for employees of a business that goes into administration
- psychological and wellbeing support for leaders, retrenched employees and those who stay
call Bridget Hogg for on 0477 016966 or email bridget@developmentatwork.com.au. See www.outplacementadelaide.com.au for testimonials and further information about outplacement services.