Ben Wilmott, Senior Policy Adviser Chartered Institute of Personnel and Development

MANAGING IN A DOWNTURN

Ben Willmott, Senior Public Policy Adviser at the Chartered Institute of Personnel and Development, provides guidance on employee engagement and the crucial role of line managers, which companies must consider if they are to survive the downturn and thrive in better times.

Job satisfaction has surprisingly increased since 2006 despite the impact of the recession, according to the Chartered Institute of Personnel and Development’s (CIPD) 2009 spring ‘Employee Outlook’ survey of more than 3,000 employees.

But this is likely to be the employee opinion survey equivalent of a fixed grin. Employees grateful to have a job at all are less likely to grumble and more likely to see scorched earth rather than greener grass on the other side of the fence. The survey shows a third of employees worry about being made redundant as a result of the recession and most believe finding a new job would be difficult. The survey also provides evidence that a significant proportion of employees that would like to find a new job are holding off until the labour market improves. Against this background it is perhaps not surprising that employees that still have a job are more satisfied with their lot.

However, the survey also identifies fault-lines that threaten to undermine job-satisfaction employee engagement, well-being and, ultimately, productivity if they are not addressed.

Work-related stress and office politics are on the increase as a result of the recession and a positive net balance of organisations have responded to the downturn by placing less emphasis on training and development, flexible working and supporting employee well-being.

In addition, employees are critical of senior managers, with less than a fifth agreeing that they trust them and only a quarter agreeing that they consult employees about important decisions.

And while most employees feel supported and treated fairly by their line manager, they are much less happy with the extent to which their manager makes clear what is expected of them, gives feedback on their performance, discusses their training and development or coaches them.

In response to these challenges facing employers, the CIPD has joined forces with the Advisory, Conciliation and Arbitration Service (Acas) to provide guidance to employers to help them manage in a recession and ensure they are well placed to take advantage of the economic upturn when it comes.

Think long term

Employers struggling to compete in arguably the worst recession for 60 years must balance the needs to cut costs for short-term survival with the longer term requirements of achieving sustainable high performance. Organisations that make deep workforce cuts as a knee-jerk reaction to cost pressures risk losing key staff necessary to drive growth as the economy picks up and will also damage morale and employee relations. Organisations need to think creatively about how to reduce employment costs, such as new ways of working and work reorganisation. Employers should remember that making people redundant and recruiting again later when the market picks up is expensive.

In addition, cutting back on the training and development budget will undermine organisational effectiveness. If cuts have to be made employers should find ways to prioritise continued spend in the areas of development that will have most impact on the business, such as line-management capability and customer service.

Business leaders and senior management should also bear in mind that poor management, for example badly planned and executed redundancies or restructuring, could well damage their employer brand, which they will rely on to recruit and retain employees when the labour market improves.

Maintain employee engagement

The extent to which employees are prepared to go the extra mile and remain loyal to the organisation will be fundamental to long-term sustainable performance. Employers should invest in the drivers of employee engagement, which CIPD research identifies as including greater availability of flexible work practices, good quality line-management and employee perceptions of fairness and procedural justice. Other factors contributing to employee engagement are: training and development opportunities; internal career progression opportunities; fair pay and opportunities for varied work.

Effective internal communication and consultation is also critical in setting a clear sense of direction among the workforce and helping employees feel that change is not simply imposed on them with no consideration or respect for their views. Consultation need not interfere with employers’ ability to manage; it simply means that employees’ views have to be considered before decisions are made.

Strengthen line-management capability

The quality of day-to-day people management by line managers is central to the degree people’s skills are put to use, their well-being and resilience and ultimately their productivity. Organisations should recognise the vital role that line managers play in every aspect of the employment relationship and make sure they are properly trained in the necessary people-management skills. Line managers also need support and leadership from senior management and from HR to equip them to manage difficult situations and avoid burning out.

Support employees’ health and well-being

Employers should make sure workplace support and occupational health provision are in place to combat increases in the likelihood of employees suffering from stress and other mental health problems. Line managers should be trained in managing stress and conflict to allow them to intervene at an early stage before problems escalate. In addition, the provision of flexible working opportunities can help employees balance their work and home lives.

Develop a strategy for redundancy so it’s there when you need it

Redundancies should be a last resort for any organisation, but it is important to have a strategy in place in case workforce cuts do need to be made. Employers need to start thinking about how they will handle significant redundancies at least three months before they anticipate they might need to take effect. HR teams must ensure they are equipped and prepared to deal with redundancy situations at both collective and individual levels as well as understand the law relating to redundancies and review procedures. They should establish a policy and procedures to be used if workforce reductions are unavoidable and communicate this clearly to employees.

Think about ways to minimise redundancies if workforce reductions are inevitable

In many instances, organisations can avoid the need to make redundancies, for example by cutting back on recruitment, taking advantage of natural wastage and/or offering voluntary redundancy terms. Employers should also consider reducing or eliminating overtime working or introducing short-term working as well as temporary lay-offs or sabbaticals. Employees whose skills are no longer in demand can be retrained and redeployed to other parts of the organisation where possible.

Consult with your workforce and employee representatives

Effective consultation is fundamental to ensuring employee buy-in during major change. Employers should consult with their trade unions, where they are recognised, and if not set up a special employee forum or consultative body long enough before the redundancies occur to provide information and to consult. Employee representatives should have paid time off and appropriate facilities in order to meet and communicate with their constituents. Employers have a legal duty to provide training for representatives, and it can also help the smooth running of the whole process. Employee representatives should be consulted about ways to avoid redundancies, reducing the number to be dismissed and mitigating the consequences of any redundancies.

Establish fair and objective selection criteria that will help you to retain key people

If redundancies are necessary make sure that in selecting people for redundancy, objective criteria are used that can be applied in an unbiased way. This can include, for example, attendance records, disciplinary records, skills, experience or competence, work standards or aptitude to work. Employers should ensure that the selection criteria are based on accurate records and are not discriminatory, directly or indirectly. In addition, organisations should also be careful that they don’t risk losing vital skills by encouraging voluntary redundancy.

Help redundant employees to find other work

Organisations should consider offering outplacement services and counselling to help redundant employees find new employment and give time off to let affected employees look for other work or arrange training. Employers should also remember that their treatment of employees who leave the organisation will impact on the attitudes and loyalty of those who remain.

Plan for the future

It is likely that employee morale will plumet in workplaces where there have been redundancies or other major organisational change. To address this and help rebuild employee engagement and commitment employers should communicate and consult at all stages, paying particular attention to ensuring that line managers are fully involved in the change programme. Senior management teams should give positive messages focusing on the opportunities as well as the challenges ahead. In addition, HR should take the lead on reallocating jobs and responsibilities among the remaining workforce, providing training for new jobs and new positions. There should be effective communication and consultation at all stages, with particular attention paid to ensuring that line managers are fully involved in the change programme.

It is only by taking employee engagement and the development of line managers seriously that employers can truly prepare themselves to survive now and thrive in better economic times.

Biography of Ben Willmott, Senior Public Policy Adviser, Chartered Institute of Personnel and Development

Prior to joining the CIPD, he was News Editor and Employment Law Editor at Personnel Today magazine. He started his career in regional journalism, where his roles included Chief Reporter at the Daily Echo in Bournemouth and Crime Reporter on the Northampton Chronicle and Echo.