In today’s rapidly evolving business environment, organisational restructuring has become a common strategy for staying competitive and agile. At Lilac HR, we understand that navigating a restructure can be complex and challenging. This blog will explore the essential aspects of restructuring from an employer's perspective, offering practical insights to help you manage the process effectively.
Understanding Restructuring
A restructure involves changing an organisation’s structure to better align with its current needs and future goals. The need for a restructure can stem from various internal and external pressures:
Internal Pressures: These include the need for more office space, technological upgrades, or the retirement of key staff members.
External Pressures: These encompass factors such as new competitors, advancements in technology, or changes in market demand requiring new operational locations.
Restructures can be either planned or unplanned:
Planned Restructures: Part of a broader expansion or consolidation strategy.
Unplanned Restructures: Often a response to unforeseen circumstances like economic downturns or sudden market shifts.
The Role of HR in Restructuring
The specific role of HR in a restructure varies, but it typically includes both strategic and operational components:
Strategic Input: Involvement in designing the new structure, planning communication strategies, and integrating changes into the wider people strategy, including resourcing, reward, employee relations, and learning and development.
Operational Input: Handling administrative tasks such as communicating changes to employees, managing contractual terms, and providing legal advice on employment contracts, redundancies, TUPE (Transfer of Undertakings Protection of Employment), flexible working, and the Information and Consultation of Employees Regulations.
Steps to Effective Restructuring
Decide What Needs to Change and How
Begin with a clear business case agreed upon by senior and line managers. HR’s involvement in this stage varies by organisation; some may involve HR from the outset, while others bring in HR later for implementation support.
Identify the Reasons for Change
Clearly analyse the drivers for change. Whether internal or external, the business case should summarise key issues succinctly. For example, a diminishing demand for a product may necessitate a shift to a new market area requiring different skill sets.
Explore Your Options
Consider various paths forward, such as upskilling existing staff, recruiting new talent, or a mixed approach. Analyse the feasibility, cost, and impact of each option, involving employees in the decision-making process to enhance engagement and morale.
Choose Your Preferred Option
Evaluate the advantages and disadvantages of each option, and select the one that best aligns with your business objectives. Clearly articulate why this option was chosen and how it will be implemented.
Communicate the Plan
Develop a detailed communication plan. Decide how to share the information with the team, provide written summaries of the business case, and designate key contacts for employee queries. Transparency and empathy are crucial in this phase.
REMEMBER: any change you want to make that impacts an employees job title, pay, working hours or working location is going to need a consultation with the employee to change their terms and conditions of employment. Check your contracts to see how long your consultation periods should be
Handling Redundancies and Contract Changes
Restructuring often involves redundancies and changes to employment contracts. Here are key considerations:
Redundancies: Ensure you have a clear, fair, and legally compliant process. Consult employees, consider redeployment options, and maintain records to avoid discrimination.
Contract Changes: Discuss proposed changes with employees, seek their agreement, and consider incentives. Provide ample time for consideration and document agreements in writing.
Both of these processes should have HR involved to ensure you stay compliant.
Maintaining Fairness and Trust
Fairness and trust are critical during restructures. Communicate openly, involve employees in planning, and offer support packages for those affected. Post-restructure, focus on team building to address “survivor” guilt and rebuild morale.
Reflecting on the Process
After the restructure, evaluate its effectiveness. Did it achieve the desired business outcomes? Consider improvements for future restructures, such as better record-keeping, clearer policies, and targeted training for staff in new roles.
Restructuring is a significant undertaking, but with careful planning and effective communication, it can lead to a stronger, more adaptable organisation. At Lilac HR, we’re here to support you through every step of the process, ensuring that your restructure not only meets your business goals but also maintains the trust and morale of your team. For further guidance, don’t hesitate to contact us.
Email: info@lilachr.co.uk
Web: www.lilachr.co.uk
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