Reorg or restructure – is your business ready?

updates + insights » Reorg or restructure – is your business ready?

Workplace reorganisations and restructures are inevitable, particularly in today’s environment with external pressures impacting on a company’s ability to remain competitive. How effective (or current) is your workplace change strategy?

According to online business magazine HBR, “a workforce change strategy should anticipate three different scenarios: a healthy present, short-term economic volatility, and an uncertain future.” Most SMEs in New Zealand take a lean approach to hiring – matching their hiring efforts to business need, both short and medium term - rather than resourcing up and down and having to deal with all of the required controls when exiting people from a business. Kiwi companies are also of a scale where they tend to have a more considered view of the impact of staff losses both internally as well as within the wider community.  

In terms of short-term volatility, we’re also pretty adept at looking for alternate ways to reduce costs without resorting to staff layoffs as a reactive option. Particularly for technical/specialist roles which are hard to fill in a talent scare market, there’s a greater appreciation for the long term value of a particular skill set versus short term cost saving. Also taking into account the time and financial cost of recruiting people and upskilling to meet the demands of the role. Whether it’s a downturn in the economy or reduced customer demand, there are creative ways of maintaining your internal people resource while waiting for a turnaround. You’ll see a lot of this happening in the current market, given the impact of coronavirus (COVID-19) and it’s broader effect on global markets.  

An uncertain future however can be incredibly challenging especially for SMEs – this includes for example the threat of a global recession as well as related market shifts and the impact of new technologies and new competition. This requires a lot more strategic thinking – reskilling capability, entering new markets, creating new roles/redeployment, flexible/creative working options - and sometimes, where a transformation or reconfiguration isn’t possible, this may result in a restructure. The key here is to ensure that staff are treated fairly - there are principles and processes to be followed as well as relevant employment law legislation to consider.

Too often however, restructures can be used as an excuse to avoid difficult discussions. There’s a reason why they are called courageous conversations – they carry some element of emotional load. Whether it’s a strategic whole of business discussion or an individual performance or disciplinary related issue, these can be really challenging conversations for some people.

When you are reviewing the path ahead for your business, in light of current or future markets, you can improve your chances of a successful outcome by having the right advice and support around the table. Particularly when it comes to decisions about people and whether you need to rethink your existing organisational structure and determine the best approach forward.  

If you are looking for assistance on your people strategy, change projects and related HR processes, or you’re a leader in an organisation looking for direction on how to have courageous conversations with your team, get in touch with us.   

The Decipher Team      

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