Corporate Restructuring and Preserving Employee Morale
During corporate restructuring, employee morale usually is at an all-time low at the troubled firm. This drop of morale during the corporate restructuring will lower productivity and hasten the downward slide of company. In our corporate restructuring practice, we see this in almost every business turnaround.
If you are facing low morale during a corporate restructuring, we would like to give you some helpful tips.
1. Before the corporate restructuring, keep your own counsel as much as possible. The reason for this is simple. As soon as you tell ANYONE about your corporate restructuring plans, the rumors will start, and productivity will slide.
2. Do all layoffs at one time during a corporate restructuring. If you don’t take our advice and have rolling layoffs over several weeks, you will see your firm come to a stand still during those weeks until you have finished all the cuts. It is much better to delegate the layoffs to the senior managers of the divisions and departments and make the cuts on the same day at the same time (preferably in the morning.)
3. Provide a fair and reasonable severance package. You do this to help the downsized employee, of course, but it has a real benefit for the surviving employees as well. When your remaining employees discover that they are the “survivors,” their first emotion is relief that their jobs are safe. But, their next immediate emotion is concern for their laid off co-workers. If you cannot tell the survivors that you have provided for the outplacements, be prepared for much anger and resentment.
4. Have an immediate meeting following the layoffs for the survivors. In this meeting, you should grieve with the survivors about those just lost, and you should start the organization thinking about the future and the immediate actions everyone needs to take to save the company.
5. Communicate regularly with employees. While the company is in trouble, the rumor mill will be in full production. To combat the vicious rumors and lost productivity associated with them, you need to have a weekly, regular meeting with employees to answer questions and make reports on the your firm’s turnaround progress.
This is just a partial list of “to-dos” for preserving morale. In the excellent corporate restructuring manual, you will find 46 additional techniques for keeping morale high during a company turnaround. This manual, “The Insider Secrets to Saving Your Business” is a top-notch guide for those carrying out a company turnaround.
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