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The unstable economy has prompted employers nationwide to re-evaluate their organizational structures. This means we can expect to see more company reorganizations across the map, with some businesses closing plants and offices and others filing for bankruptcy.
Even before the pandemic, organizational changes were quite common: Gartner considers organizational change “the new constant,” with the typical organization undergoing five firm-wide changes in the last three years. Companies unprepared for such overhauls risk diminishing their employer brand and could suffer low morale and voluntary turnover.
What can organizations do to protect their image, be there for employees, and ease downsizing pains? Read on.
Five Tips for Employers on How to Deal with a Company Reorganization
1. Honesty and transparency go a long way
Keep employees informed about the changes taking place when appropriate. Inform your workforce why the shifts are happening and what employees can expect moving forward.
Transparency is especially important during layoffs and reductions-in-force. One study found organizations usually had better financial results after a layoff when the staff believed the event was well-handled and done for a strategic reason.
2. Communicate with employees as they navigate how to deal with a company reorganization
When deciding how to deal with a company reorganization, the best organizations look not just to the leaders but also to their larger, according to a Gartner survey.
Encourage employees to give feedback and share their feelings about the company reorganization—even when the responses may be negative. Ask open-ended questions in group meetings and one-on-ones to stimulate discussion. Also, cultivate authentic communication, thanking employees publicly who give honest answers. Facebook COO Sheryl Sandberg is an advocate of this practice, stating in Lean In: “It encourages [team members] to continue while sending a powerful signal to others.”
An open-source approach using more inclusive strategies like open communication can lead to more informed decision-making on how to deal with a company reorganization.
3. Consider what success looks like under the new structure
Keeping your company structure and industry, determine what goals you hope to achieve through the reorganization. Are your goals the same as your legacy model? What processes are in place to help talent as they figure out how to deal with a company reorganization? Use your company values and mission as your anchor as you go through the reorganization. Know success after a reorganization often takes time: It can take three to four years to see results. Remember not to yo-yo between previous and current structures, as this can confuse team members and affect profits.
4. Help employees adapt and calm concerns about jobs
Nearly half of American workers (48%) have layoff anxiety, according to Intoo’s 2019 Layoff Anxiety Study.
With work stress the most mentioned personal stressor in an APA survey, combined with slowing-but-increasing layoff numbers (3.8 million Americans filed for unemployment insurance of April 30), your workforce probably feels overwhelmed. Watch out for common signs of stress at work such as fatigue, anxiety, restlessness, lack of focus or motivation, and sadness, as employees navigate how to deal with a company reorganization. Calm job concerns by communicating timeframe, restructuring reasons, and other essential need-to-knows.
If your organization must conduct layoffs, follow best practices for virtual layoffs and treat affected employees with compassion and respect. Whenever possible, provide longer-term outplacement services so affected employees have access to resources to help them find new jobs. Most of all, give employees time to process how to deal with a company reorganization, as this is a huge change in their lives.
5. Follow up with employees to see how they’ve transitioned
For former employees who have given your organization permission to stay in touch, show you care by following up with them. Keep contact also with furloughed employees, notifying them of when work is expected to recommence.
How to Deal with a Company Reorganization: The Takeaway
In general, inclusive strategies that involve and inform employees on how to deal with a company reorganization are more effective today than traditional top-down approaches. Gartner‘s research shows open source methods increase profitability during a change by a whopping 22%. Communication and transparency are key ways companies can protect their employer brand during these challenging times.
For any workforce changes you may be considering as part of your company reorganization, Intoo can help. We offer outplacement services to support exiting employees as they look for new jobs. Schedule a demo to find out more about how Intoo can help you with your reorganization.
INTOO staff writers come from diverse backgrounds and have extensive experience writing about topics that matter to the HR and business communities, including outplacement, layoffs, career development, internal mobility, candidate experience, succession planning, talent acquisition, and more.