PERSONNEL RESTRUCTURING

Transcription

1 PERSONNEL RESTRUCTURING Human Resources Master November 2010 Personnel restructuring has become, nowadays in a very common process in several companies around the world. The global crisis has forced the executives to reduce drastically the number of workers in order to reduce their costs. The problem is how to do that without causing too many social consequences. Group number 2 Rocío A. García Moro Ernesto Rodríguez Guerrero Rocío Castro Arispón Miguel Moreno Moyano María Jimeno Martínez

2 PERSONNEL RESTRUCTURING 1. What is a personnel restructuring process? Restructuring is defined as the alteration or cessation of an activity, as part of an overall Faculty Group or Support Group plan, which results in a reduced staffing cost or increased income generation. In addition to major restructuring schemes, this definition will also allow simple, opportunistic voluntary severance with non-replacement of the departing staff member as long as this is an alteration of activity resulting in continuing reduced staffing cost. It would not, however, cover the same situation if there were a direct replacement, unless a reduced cost could be demonstrated over, say, a ten year period and/or, exceptionally, where a replacement is one component of a much larger reorganisation of activity. It is emphasised that all proposals submitted for consideration under this framework must be part of a coherent plan. It is recognised that some Support Group plans may need to include the provision for seeking volunteers for severance or early retirement, but in a targeted and focussed way, as part of their overall plans to achieve financial equilibrium and a sustainable staffing profile. Individuals will not be able to apply directly for voluntary severance, other than as part of such a scheme. 2. Reasons that lead to a restructuring process The crisis does not close companies, but disability to react adequately against the crisis does. To cut costs is very easy. Reduce cost efficiently in a sustainable way in the time without act against the defined strategy is much more difficult. Optimization cost has become in a need in a lot of companies to assure their survival. In this way, the companies adopt different approaches: - Instinctive reaction that focus on reduce cost in a indiscriminate way without consider the impact it could have.

3 - Tactical approach: The personal reduction are fitted inside a reduction cost program. - Strategic approach: The question all the elements that don t reach value to the business. Decide what the companie has to continue doing or stop doing. The workers contributions to the actions depends on the focus choosed. We don t have to forget that people are the most value resource and the behavior has a direct impact in all the process we do. There are four areas that most of companies need to strengthen in order to get success in their reducing cost areas: 1. Focusing: Most of intermediate executives don t like to cut cost in their areas, so they use to focus n other areas. 2. Objectivity: Personal relations, emotional attachment to some projects and personal comfort can provoke that reduction cost opportunities don t be identified. 3. Experience and methods orientated to implantation of changes to get good results supported in the time. 4. Speed of implantation: Task by day a day receive more protagonism and the companies loose their initial impulse. There have been three major forces at play here. a. Reducing costs: In nearly every industry organizations are going through restructuring, mergers, or other cost-cutting efforts. The HR department plays a major role in these changes both by facilitating these changes and by eliminating duplication in its own operations. b. Implementing new Talent and Capability Management Solutions: The second major driver behind new HR organizations is a need to implement talent and capability management strategies. Consider one of our clients who is a large, well known consumer

4 packaged goods company. This particular company has a well established talent management strategy which moves people across functional organizations (e.g. marketing, sales, manufacturing) from product line to product line. These people rise through the organization in these functional roles and eventually have the opportunity to become general managers of consumer products. c. Adoption and Integration of New HR and Learning 2.0 Technologies: The third major change which is causing HR to change is the rapid adoption of new HR and Learning 2.0 (read social networking ) technologies. It is now possible to purchase an HRMS system which includes integrated functionality for goal alignment, performance management, succession planning, talent pooling, career management, and more. And in the area of enterprise learning, today s new learning management systems (LMS) now have social networking, collaboration, messaging, and content management embedded. 3. Basics questions to considering Here are five such career development strategies organizations should put into action during these changing and uncertain times: a. Ready your leaders and managers. Increase the skill and confidence of your managers to have effective and meaningful career conversations with all their employees throughout the change process. Building your managers skills in this area is critical. Their ability to convey the changes, engage employees on the potential career implications for them personally, and build readiness for any potential outcome is the key to success. The objectives here are simple: keep your best talent, maintain productivity during the change, and ensure that affected employees are redeployed or leave the organization on good terms. Remember --- these people are key to your employment brand and customer loyalty even after they leave.

5 b. Keep your best! Most important, don t lose your best due to uncertainty or inaction. Remember, high performers are usually the most employable and many times are the first to leave given inaction. Your managers all know who these people are, even outside of the formal succession planning process. This is the time to be sure that your managers are ready and skilled in having effective engagement and career development conversations with top talent. Your managers are key to not only sharing their perspective on the changes occurring, but also acknowledging a top employee s strengths, talents, contributions, and most important, why he or she will be critical in the future of your company. Be sure that you focus on your most talented employees --- the ones with specialized skills, customer loyalty, and long-term potential. c. Ready all of your employees before the change or as the change is occurring. Remember, uncertainty leads to decreased productivity, decreased employee engagement, decreased customer satisfaction, and ultimately a decrease in the bottom line --- especially important to avoid in an uncertain economy. Help all employees get their own career development plan in place, understand the changes, and begin to formulate what could be the impact on them. With this foundation, all employees can begin to develop two scenarios for themselves: Plan A: What if I m not affected? What would be the best shortand long-term scenarios for me? Or, Plan B: What if I am affected by the change? What will that mean for me? Will I have opportunities in other parts of the organization? What practical steps do I need to take? Just by helping individuals to better understand what s going on and empowering them to be proactive in either scenario will increase their energy, their confidence, and ultimately their productivity and the speed at which they support your organization through the change. d. Ready employees who will be affected by the change. Give them tools and resources to redeploy successfully to other more viable and growing areas of the organization that fit their professional aspirations. Redeployment should always be the first option if there are other parts of the organization where their talents could be utilized. Redeployment will not only support your affected workforce, but will significantly cut down on severance, outplacement, search, and hiring costs. Employees with a history with your company will also assimilate more quickly into other divisions and quickly become productive in their

6 new roles. Give these employees the opportunity to clarify their strengths and accomplishments and the value that they ve brought to the organization. Give them the skills to network, interview, and develop their internal resumes so that they will be viable candidates for internal positions. Remember, redeployment will not only minimize the negative consequences for affected employees but will also raise the emotional energy and productivity of those who stay in their current positions. 5. Energize the survivors before, during, and after the change. Remember, these are the people who you fought to keep and who will now continue to make your organizational successful. They too feel the uncertainty of the changes occurring around them. Affected employees roles and projects will be delegated to them, and soon they will begin to feel overworked and underappreciated. Head this off at the pass. Energize survivors by providing tools to help them clarify their own strengths, contributions, and career aspirations. Help them see why staying with the organization both short and long term will be a win-win for them and for the business. Jump-start and engage your survivors by helping them understand that this is an opportunity to take on additional responsibilities, gain new skills, and position themselves for future opportunities aligned with their own career aspirations. Don t wait. The time for action on career development strategies is now. Your managers readiness and skill to have career conversations in sync with your employees readiness to engage in such discussions will renew employee loyalty, inspire and build excitement in the future, and ultimately increase your company s productivity, customer loyalty, and the bottom line. 4. Comunication: The key in time of crisis The companies that are forced to reduce their cost may open the workers information about the real situation to keep the commitment of the team. The executives can keep the level of commitment and productivity of the workers with opened communication programs while and after adopt actions related with a restructuring process.

7 We have to bear in mind the next aspects: a. Early preparation: The company have to provide messages about the companies condition and actions to carry out. b. Communicate the reasons that originated the lays off and face the difficult questions. Transparency is fundamental to keep the confidence. Workers who qo out the company must know the support the company is going to offer them and the valuation of the work done. The rest of worker must be insecured about his position in the company. In that way is important to guarantee the consistency between messages offered to the workers who go out of the company and the workers who remain in the company, to keep the executives credibility. During the restructuring process, the companies won t have all the answers to the questions done, but they can share information about how they took some decisions. c. Participation of the rest of workers by means of communication of future vision: Employees more compromised are more resistant in time of changes and they will keep the performance in difficult moments. Corporative vision will help the company and the workers to carry this stage of changes. 5. Legal aspects a. Alternative to choose between a process of regulation of employement and an individual lay off. Advantages and disadvantages in each case. b. Causes that let carry out a restructuring process. Economic, technical and organizational causes. c. The restructuring employment process has to be authorized by laboral authority. There are two main factors: The strength of the allegued reasons and the social plan. d. Steps and objectives of negociation.

8 e. With who are the company negociating?. Representatives of the workers and union advisers. f. Labor authority g. Social plan. Minimal indemnification. h. The affected ones i. Communication plan. Previous detailed report and way to communicate it. j. Anticipation to possible pressure measures of employees