Restructuring is a common practice that is used when a company is losing money or not producing as much in profits as it once was. The restructuring process involves going through every aspect and expense of the business and evaluating its purpose and need. This includes employee departments. In many cases, jobs will be cut and employees will be laid off or permanently let go. This process is extremely difficult and requires careful consideration and evaluation.
Develop a restructure plan
Before you begin to make cuts and lay off employees, it is important to develop a restructure plan. Establish exactly how much needs to be cut, and from what department it needs cut. This will give you a base to work from. It will provide specific guidelines to back your restructuring decisions. It can also make the laying off decision easier, as you can think about it in terms of numbers. Develop the restructure plan with your financial advisor or financial department to ensure its accuracy.
Conduct interviews for open positions
Sometimes, it can be more difficult to select those you will have to lay off. It may be an easier process to instead, select those that will continue work. Conduct interviews with each and every employee as if you were first hiring for the open positions. This will allow you to put aside emotions and other non work related considerations. Choose the remaining employees simply based on their interviews, their job skills, and their job performance. The good thing about this process is that you already have a good idea of each and every employee?s job performance and work ethic.
Offer settlement packages to those you let go
It can be difficult to let employees go, simply because you have to restructure. You may be worried about these employee?s work prospects and ability to get by financially. If possible, offer a settlement package to those you are forced to let go, especially the employees that have been with the business for many years. This may not always be an option, depending on the finances of the business, but is a great gesture when possible. You can work with your restructuring consulting professional on developing a settlement package for each of the laid off employees.
Consider length of employment
About 2.7 million workers voluntarily left their jobs at the end of June 2015, which is a 25% increase compared to two years ago. When you consider length of employment in selecting employees, you are choosing ones that have proven their dedication and loyalty to the company. When you are making your cut decisions, use length of employment as a factor. Otherwise, you may choose employee that end up leaving the company shortly after the restructure anyway. Then you are left using human resources executive recruiters to fill open positions.
Ensure you are following legal policies
Different states have various legal policies regarding hiring and firing, even in restructure cases. Depending on your location, you might be required to keep certain demographics to ensure gender and race diversity. This may not be a bad thing, however, as McKinsey?s research shows that gender diverse companies are 15% more likely to outperform their peers and ethnically diverse companies are 35% more likely to do the same. Work with your human resources executive recruiters to ensure that you are following proper legalities in hiring and firing decisions.
Every year, companies are required to go through the restructuring process for a variety of reasons. Either the company is failing, claiming bankruptcy, or is being bought out. Restructuring often requires letting a certain percentage of employees go. Working with human resources executive recruiters and HR recruiters can help with making hiring and firing decisions. Additionally and most importantly, human resources executive recruiters can provide insight into the most beneficial employees to keep that will turn the business around towards success.
