COST reduction programmes - a bit like mergers and acquisitions, and integrations - are simply processes.
They are often mechanical and sound painful to the employee.
UK employment legislation brings its own challenges.
Employers are nervous about having informal discussions at the risk of stepping out of legal requirements.
The oil and gas sector is largely focused on growth; we are not particularly good at reducing costs and managing budgets.
But we often forget that managing headcount reduction is about people and not processes.
When we hire our staff, we do our best to create the greatest proposition.
We’re positive, we communicate, we talk about opportunities, and we make it clear that this new relationship is going to be a strong, fruitful one.
However, when we lose staff through redundancy, all too often we hide away from difficult discussions.
It’s emotive and we fail to be leaders.
An abundance of “corridor” conversations still exist - where decisions are made without fair selection - so it would appear we have not learned from previous recessions.
For example, people being dismissed only hours after finding out that companies are struggling, with no consultation or discussion, and businesses trying to avoid redundancy payments.
Cultures take years to form and minutes to destroy.
Those who remain behind - the “lucky ones”, according to many managers - see first-hand how redundancy processes are managed and many are not impressed by their employer.
Of course there are companies who consult fully, communicate openly, and offer some form of outplacement from a genuine intention to help the individual secure future work.
One leader even helped their employee find new accommodation.
But these examples are sadly few and far between.
The fact is the profit and loss sheet will never reflect what we have spent on building good company culture.
We will, however, see the costs of destroying the investment made; in a lack of productivity, higher absence rates and staff turnover, which will come when the oil price rises.
So, as leaders, let’s think how we should “show up” and what we need to do to ensure our cultures are maintained, as much as they can be during a cost reduction:
- Communicate, communicate, communicate: We have to be prepared to talk openly about what’s coming. Equally, we cannot communicate until we have some answers. Timing is everything.
- Careful and considered delegation: Would you delegate a key client meeting? Failing to attend important employee meetings can speak volumes.
- Be clear on the reason for dismissal: If it’s a redundancy, pay redundancy – we’re not particularly great at performance management in the UK, so dressing up a redundancy under this banner will only come out in the wash (or at a tribunal).
- Be a leader: This is your opportunity to show that you are a leader and not just a manager: have a clear plan, a clear business case, and a fair process.
- Engage with your “survivors”: Do not consider the staff behind to be “lucky” and don’t underestimate how being through the process has dampened their love of your company. Gauge the culture independently and find out what your staff are saying to their friends in the pub about working for you. If you know, you can do something about it.
Take time now to review the lessons, as when the tide turns and you have vacancy lists as long as your arm, you may wish you had.