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Turn Setbacks into Strength: How to Preserve Workplace Culture After Layoffs.

Despite the continued competition for great talent, many organisations are non-the-less making difficult decision to ‘down-size’ or ‘right-size’ their businesses.  Common reasons for these changes include the need to reduce costs, streamline operations, align product portfolios to strategic objectives and/or manage the shift to AI solutions or automative processes.

According to Randstad RiseSmart’s Global Severance report 2023, nine in 10 employers surveyed expect to reduce their workforce size in the upcoming year, based on a survey of 400 HR and procurement professionals from around the globe, including in the U.S. In a 2024 survey of 6,105 Australian workers conducted by Randstad, showed 44 per cent of workers are worried about losing their job, up from 27 per cent in 2023.


So, while redundancies might be a fact of normal business practice, from an employee’s perspective being told ‘the life changing news’ that you no longer have a job at that company, can be absolutely devasting and scary.  Having personally delivered many of these difficult messages, I know only too well how emotionally distressing this news can be.  I’ve seen first-hand the range of emotions that employees go through; including anger, shock, sadness, anxiety about meeting their financial obligations, shame or embarrassment to share the news with family and friends, and worry about how long it will take to find another job – to name a few.



As the CEO or Head of People & Culture of your company, managing the redundancy process and maintaining your positive company culture can be very challenging.  How you communicate the message and treat your exiting employees will affect your employee’s perception of your leadership, integrity, transparency and compassion toward others. 

  “Corporate culture matters. How management chooses to treat its people impacts everything for the better or for worse”. Simon Sinek
 
In March 2023, Atlassian (American-Australian software company) communicated the difficult decision to rebalance their team for the first time in 20 years.  They said good-bye to approximately 500 employees and, in the spirit, of their open company ‘No Bullshit’ culture, they shared the truth on why the downsizing was needed.  They went on to demonstrate compassion, empathy, and care for the impacted employees plus a range of unique benefits and services to support this difficult transition.  Exiting employees were also given the option of a farewell gathering to say good-bye to friends and coworkers.    (A choice not often provided in a redundancy process).

The surviving employees were also supported and allowed time to process this difficult news including the opportunity to ask questions directly to the founder during the ‘Founders Tour’ held within 1 week after the announcement..

Why treating your exiting employees is so important


How you show up and treat your employees during a time of fluctuation, downturn and uncertainty, will impact their feelings towards the company.  Ensuring a well-planned strategy keeping the employee experience as positive as possible for the exiting employee, will reduce the impact to the organisation.
Getting this wrong can tarnish the company culture, potentially bread resentment or anger, reduce team morale or employee engagement and very likely damage your employer brand.   

“Employers must prioritize the employee experience from entry to exit for long-term success”

Lindsay Witcher Senior vice president at Randstad RiseSmart




Best practice redundancy process:


  1. Thoroughly plan the process within the legislative requirements and openly communicate the reason for downsizing.

 

  1. CEO or MD to deliver the message at the beginning of the week to enable consultation and team communication sessions. All other senior leaders should be available to support teams post the announcement. 
 
  1. Treat all the impacted employees with respect, care and compassion – remember you have just changed their life.  This includes respecting privacy and allowing then space to process.
 
  1. Acknowledge and celebrate the employee’s achievements and years of service. Allow them the option to say goodbye at a farewell gathering because workplace connections matter and people need ceremonies to share stories and gain closure.
 
  1. Provide generous severance packages where possible
 
  1. Offer professional outplacement services to support with career mapping, resume writing, interview preparation and career coaching
 
  1. Extras – healthcare benefits (in USA) or enabling them to keep their work laptop and / or mobile phone (after being reset by IT), accelerate vesting options or authorising the pro-rata pay-out of their short term incentives.  

  1. Support & ongoing communicate with staying employees plus the provision to ask questions – ideally face to face. Prepare your thoughts and ideas – be clear on your message, the issue(s) and desired outcome (don’t wing it)

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