Managing Redundancy in Organizations: The HR Way

Managing Redundancy in Organizations: The HR Way
When organization is involved in the exercise of planning terminations in form of retrenchment or VRS it forgets to plan for those who remain in the organization after the ‘storm’. After such downsizing exercises, such employees who remain with the organization ‘physically’ may not feel more fortunate than the ones who were told to leave.

The year 2022 and that too especially the second half of it has witnessed a series of employee terminations in tech industries from smaller firms to MNCs with as many as 11,833 startup employees in India losing their employment across industries.

As per reports, after a CEO of a recently acquired US-based social media company communicated a Google form to all employees to either agree to stay ‘for long hours at high intensity’ or pack bags with a severance package, many employees reported to take exit option.

Also as reported, those employees who were terminated from the employment only discovered this termination when they were broken off from all of organisation’s systems, as well as their organization’s laptops, and one employee reported, “I suddenly got logged out while in front of my laptop, chatting with the team….”

HR practitioners have felt such leader may be moving in wrong direction as far as his HR management style is concerned and may lead to retention, recruitment, and legal risks later. The moral of the story—handling redundancy needs to be very cautiously managed, in a more humane way, due to the fact that amongst other factors, such a process is going to have an impact on an employer’s overall credibility in the eyes of the public as well.

Recently Global HR Guru Dave Ulrich wrote, “As part of providing human capability (human capability refers to an array of talent, leadership, organization, and HR function initiatives) HR professionals are caregivers for individuals, architects for organisations, and coaches for leaders.”

Handling role redundancy effectively requires HR to be caregivers for individual employees and organizational architect for navigating organisations in tough times.

HR professionals are given charge of handling and dealing with terminations, retrenchments, and redundancy, and the major role on shoulders of HR not only is to reduce litigation, grievance handling, redeployment, and compliance with labour laws but also handling such situations with empathy, concern, care, and respect. HR has also to ensure to minimize the impact of the ‘storm of change within the organization’ on the morale and mental health of employees.

When organization is involved in the exercise of planning terminations in form of retrenchment or VRS it forgets to plan for those who remain in the organization after the ‘storm’. After such downsizing exercises, such employees who remain with the organization ‘physically’ may not feel more fortunate than the ones who were told to leave.

The survivors are left with feelings of guilt as well as vacuum, with a feeling of resentment and aggression towards the management.

Handling Redundancy Drive: Steps for HR

Here few steps are being suggested for HR practitioners/leaders/top management to keep track of for managing redundancy drive well:

1. Maintaining truthful and open communication: Truthful communication on part of top management, communicated through HR may prevent a lot of unwanted incidents which may not be right for the organization’s brand image as well as for the employees.

2. Make employees understand it’s a business necessity & never be rude and insensitive: Loss of a job is undoubtedly a tough time for the employee when he feels emotionally pained and uncertain, alone and scared. It is important for the organization to work on the retrenchment process, show empathy and compassion and reinstate trust.

3. Practice transparency: Communication to employees that it is more of a role redundancy than people redundancy is important. Employees should be told that it need not be taken too personally as there is nothing ‘personal’ about it and it is just a business need and exigency that caused it. HR needs to be honest and not defensive about it. Transparency should be practiced at such times at each and every step, organizations should neither take advantage of employees nor victimize the managers.

4. Executing redundancy exercise: A meeting of HR professionals may be conducted with those who are identified to be affected by job loss. A meeting at this time with union members may also be desirable to prevent any untoward incidence from occurring while such exercise is going on. Such meetings should convey without fail:

  • Policy of organization and method in which such exercise of shedding manpower would be carried out
  • Knowledge of labour laws, especially Industrial Disputes Act, 1947, and in future IR Code
  • The reason why organization is going for retrenchment
  • Opportunities and possibilities for redeployment at this stage should be chalked out and communicated to the employees
  • Number of employees who are being considered for shedding
  • Time period over which such exercise would be carried out
  • Opportunities for VRS if any

5. Ensuring dignity and fair treatment to those who leave: During the retrenchment exercise, it is vital for an organization to reaffirm, in practice, the importance of its employees. This can be expressed through fair treatment of those who are leaving (full of respect and dignity) and through a renewed commitment, nurturance and care to those who are the survivors.

6. L&D team may be enabler in finding a solution through reskilling employees & in designing career pathways: All redundancy management programmes should be dealt with planning. Reskilling for the new role must be a regular exercise for the organizations.

7. Providing Outplacement and Counselling: Even if retrenchment appears unavoidable, planning should be done far in advance to have skills in place for HR managers to handle such difficult situations, such as ways to educate & communicate with Union members (in a manufacturing set up specially) and programmes aimed at ensuring ways in which HR professionals support employees during the tough phase. Outplacement programmes are meant for assisting affected employees develop a positive outlook, not to feel stressed out and depressed and to be equipped with relevant competencies required to search another job. Also outplacement programmes guide employees through psychometric testing in self-assessment to make them understand what other roles they can play effectively.

8. Managing exit interviews: Exit interviews may help employees by giving them an opportunity to express their feelings out which may lead to healing of their wounded mind & soul. Also, employees may be able to share their insights and feedback during such interviews as to how organization needs to move ahead with such redundancy management in future. The organization may get very useful insights as to whether it went in right direction or as to what went wrong and necessary learnings and corrections for future.

9. Handling Survivors: Keeping the retained employees motivated and positive may not be easy and focus should be on including such practices. HR needs to help survivors manage their negative emotions so that they may again develop ‘emotional connect’ with the organization. Trust building is vital to create feeling of positivity and optimism in people.

For organizations to outgrow tough times and move towards effectiveness, there has to be a long term strategy (i)to handle tough times and (ii) to manage skill obsolescence amongst employees. Even planning for harder options such as employee termination amounting to retrenchment has to be done with the element of fairness which may lead employees to understand that the organization was transparent, fair and just and it was not just doing the paper work of claiming that it practices fairness and trust as part of its human resources policy and organizational values.

Open communication is important at all stages to discard any kind of rumours or grapevine that may prevail within the organization. To get best out of people, best environment has to be created first. Not only the employees who are told that their skills/role have become obsolete and are not required by organizations are to be cared, supported and respected but also those who are the survivors need to be counselled as well, from the emotional shock and trauma they go through.


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