The Ripple Effects of Redundancy on Organisational Wellbeing

Monday, November 23 2020
Written By: Poppy Millett
One of the most concerning statistics we’ve seen in the last few weeks is that almost half (49%) of professional workers are fearful about their job security and possible redundancy. Often this is not because of the likely impact of the COVID pandemic on the future viability of the companies they work for – those […]

One of the most concerning statistics we’ve seen in the last few weeks is that almost half (49%) of professional workers are fearful about their job security and possible redundancy.

Often this is not because of the likely impact of the COVID pandemic on the future viability of the companies they work for – those that have remained operational and in profit during this time. Instead, it can be a fear of how the global crisis might change the way those companies work, making room for re-organisation. 

Since March, UK businesses have been forced to find new ways to ensure that the day to day tasks that maintain revenues continue to be carries out in a way that is as close to 'business as usual' as possible.

That, together with the extensive furlough scheme that saw the daily employment of a staggering 9.4 million people temporarily suspended, has offered many businesses across all sectors an insight into how their traditional structures might be reorganised in the future so as to drive down operational costs.

If we then add in the negative impact that has been felt across the hospitality and arts sectors - both decimated by the lockdown restrictions - and the adverse effect on those self-employed public-facing jobs, such as cleaners or gardeners, the ripple effect of fear is significant and undeniable.

And let's face it, people have legitimate reasons to be worries about their financial security. By the start of October 2020, the UK employment market had shrunk by half a million jobs as companies began to feel the bite of economic reality. 

And all of that doesn’t take into account the as-yet unknown numbers of people who will be placed at risk of redundancy by the latest lockdown measures.

The wider impact of redundancy

Redundancy has always been a reality of any economy, in good times as well as bad. As technology and markets change, so operational and resource requirements change with them. But the effect of any re-organisation – whether it involves one job or many – affects the whole organisation.

Obviously, those whose roles are subject to the redundancy process generally find it to be a highly distressing experience (and it’s important to remember here that we make roles redundant, not people). 

But the impact is wider reaching than that, sending ripples of disquiet and unrest through the organisation. 

Many business leaders and managers who are responsible for implementing a redundancy process find it unpleasant and experience feelings of guilt; colleagues of those affected also often report feeling guilty that their friends and workmates are let go while they remain; more still say they find redundancy processes to be unsettling, triggering anxiety and fear over whether their own jobs might also be at risk further down the line.

Crucially, a redundancy process can impact on the trust employees have in the organisation – leading to low morale, poor employee wellbeing and, ultimately, reduced productivity and profitability.

Communication is key

Communication is always at the heart of successful and supportive businesses, but that is never truer than when redundancy is in the air. 

It’s a time that calls for dynamic leadership, clear communication, transparency and honesty from those who are implementing and leading change.

For employees, emotional wellbeing is inextricably linked to feeling secure in and knowledgeable about their roles. Understanding the context for change and seeing a clear vision for the future are important for this to be the case in instances where redundancies have been made. 

The three stages of change – denial, doubt and acceptance – represent a journey your teams need to be taken on and many employers forget as it’s a journey senior management has already been on. 

This often makes it hard for business leaders to understand why their employees can’t see the benefits that lie on the other side of what is usually a distressing process.

Creating a vision for the future is all well and good, but it’s understanding how your teams are likely to respond to and using that to communicate effectively (often several times over) will be the difference between slow and fast adoption of that vision.


The psychology of acceptance

At Luminate, we often talk to business leaders and their employees about the chimp brain and human brain, as outlined in Professor Steve Peters’ book, The Chimp Paradox. 

The chimp brain – instinctive and irrational, highly attuned to primal threat and deeply suspicious – is dominant during the denial and doubt phases of change. The human brain – more rational, considered and thoughtful – is the gateway to acceptance.

Being able to understand which of these modes any given individual or team is in – and those closest to the perceived ‘threat’ will be harder to engage than others – will be the key to managing through the process. It will help you offer the right kind of support where needed and show your team that you value their wellbeing – ultimately allowing you all to emerge successfully onto the sunlit uplands at the centre of your vision.

Managing change (and possible redundancy) well

So how, at a time of unparalleled economic uncertainty, do we navigate a clear channel through the turbulent waters of redundancy and re-organisation, and look after the mental health of the people who make our businesses what they are?

Here are some things to think about:

 Be honest, clear and transparent in how you communicate

 Make time to engage with people – finding effective ways to do that virtually at times like this

 Be prepared to explain the context and vision for re-organisation many times, often to the same people

Allow people time to process what they are experiencing

 Understand that, at the point at which change is announced, those implementing it have already completed a change journey that the majority haven’t even begun

 Ensure you have processes in place to safeguard the emotional wellbeing of your employees – both those staying and those who may be leaving – your bottom line will thank it for you later

If you’d like to find out more about how Luminate can help you to navigate the challenges of redundancy and change, please get in touch and learn how our experience and expertise can give you the tools you need to create supportive processes that put people first.



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