Company transition: three ways HR leaders can get on the right roadby
HR leaders need to find ways to support employees during periods of company transition - with the best strategies built into an organisation's overall culture, not hastily created at the last minute.
Over 50 major retail chains went bankrupt in 2017 - up from 47 filings in 2016 and 30 in 2014.
It seems as though retailers across the nation are in similar danger. While a few are on the brink of bankruptcy and looking for creative ways to evolve, others are tightening up operations and organisations to ensure they maximise profit and appeal to modern consumers.
Sears, for example, cut over 1,200 jobs in its California location, and closed 142 stores nationwide. The Ingka Group, operator of most Ikea stores, cut its global workforce by 5% in an attempt to shift toward smaller stores and more online shopping.
Even Starbucks, known for its company culture and employee benefits, laid off about 350 corporate employees in 2018. When we look beyond these numbers, however, it’s not always as dire as media headlines make it out to be.
Workforce transitions are not about lack of financing but due to a pressing need to appeal to changing consumer preferences.
For both Ikea and Starbucks, the workforce transitions are not about lack of financing but due to a pressing need to appeal to changing consumer preferences.
In fact, even as Ikea eliminated 7,500 jobs, it declared its reorganisation should lead to the creation of 11,500 new jobs as it aspires to expand into 30 new smaller-format stores.
Similarly, the job cuts by Starbucks “came as a result of work that has been eliminated, deprioritised, or shifting way of working within the company,” according to the company’s CEO Kevin Johnson.
Planning for change, even in good times
The bottom line is that company transition doesn’t just happen when skies are gray - or when the employer is going bankrupt. They are happening more frequently as a result of tougher shareholder expectations or evolving consumer preferences.
Big brands like Ikea and Starbucks are looking five, 10 or even decades into the future to determine if their staffing structure and run-of-business work meet the needs of their customers.
Businesses, and more specifically the HR leaders they employ, should strategise and plan for company transitions regardless of the financial climate.
As retailers, alongside employers in most other industries, enter a world of technological and generational change, the HR teams that find innovative ways to keep top talent engage and productive will ride the transition with ease.
HR leaders they employ, should strategise and plan for company transitions regardless of the financial climate.
It’s these employers who will have an easier time maintaining a positive employee brand and reputation too.
As we look ahead to 2019, HR leaders should start thinking about ways to patch up workplace morale and culture and how they plan to provide better support for employees in the case of company transition, including restructuring, layoffs, or even departmental change.
The best strategies aren’t reactive to tough times but rather ongoing strategies to build resilient company culture. Here are three areas to start:
1. Build trust
When company transition kicks in, the trust employees have (or don’t have) in their managers, and in their team, will make or break the situation.
Building trust happens through strengthening relationships.
As HR practitioners, it’s critical to build this capacity into your leaders and managers. Managers should be held accountable for what they say they’re going to do and be a shining example of follow-through and resiliency.
Building trust happens through strengthening relationships. Managers must be able to show individuals they care about them as individuals and not just as a source of work, and this type of attitude must trickle down from the very top and be supported by the human relations team.
Company culture itself thrives on trust and a stronger culture is often formed when teams have this type of trust already in existence. Your HR team can be a driving force of this type of trusting culture by encouraging and welcoming employees to be themselves and supporting managers in their quest to help employees find their sense of purpose and belonging.
2. Bring employees along for the ride
Transition comes as a shock when employees are left out of the loop on day-to-day activities. Practice transparency, where critical information shared from the top is trickling down to all employees.
Most employees would much rather take it into their own hands and curb costs instead of seeing their colleagues let go.
You might be pleasantly surprised to see how employees begin to act if they hear about the company’s attempt to cut costs; most employees would much rather take it into their own hands and curb costs instead of seeing their colleagues let go. Through the good times and the bad, transparency is key.
And when unavoidable transitions occur, even as simple as a company reorganisation, always point employees back to your north star - the company’s mission or vision for the future.
Taking it one step further, encourage managers to communicate openly and regularly about employees’ own future. When employees find small ways to gain experience that help them achieve their own personal goals, huge company transitions seem to impact them less.
3. Provide careers, not jobs
Gartner reported that lack of career development is a key driver of employee attrition, cited by 40% of departing employees as a dissatisfying factor in their job.
In fact, nearly half (42%) of workers are passively open to new opportunities. For recruiting and HR teams, this means that top talent is at risk of leaving if not given opportunity for career development.
Many retailers, including Ikea and Starbucks, that face major company transition are at a fork in the road; they must decide between letting employees go and rehiring, or reskilling in order to move people around in the organisation.
Ideally, HR leaders will already be considering how employees can sharpen skillsets or move around to try new things within the company so when transition does occur, it’s not as dramatic and employees end up better off. It starts by thinking of the employee experience at your company as part of the employee’s career, and not just another job.
Many retailers...must decide between letting employees go and rehiring, or reskilling in order to move people around in the organisation.
The enormous shift in employee-employer relationships isn’t just changing how employees react when reduction-in-force happens - it’s forcing companies to invent proactive strategies in order to enhance the employee experience and save employer reputation.
And the question of caring for employees isn’t limited to corporate responsibility; it has a direct effect on the bottom line. Strategies like building trust, reskilling and finding creative ways to ensure employees can fulfil their career goals make employees happier in their day-to-day work, while making your company more resilient.
To truly prepare for inevitable company transition, don’t wait until it happens. Your HR team can begin making small, strategic changes today.