In our last article, we looked at how to manage your reputation through the recruitment process in order to attract better candidates.

A number of our clients are facing an equally difficult challenge as they resize their organisations to face new economic realities. How do you maintain your company reputation whilst downsizing?

Can a company fire well to hire well?

There are multiple internal and external company stakeholders to consider, as well as other interest parties such as competitors, regulators, etc. A poorly designed and executed retrenchment exercise can be tremendously damaging to the company’s brand. On the other hand, companies who manage the process well can turn a potential liability into a long term asset.

We have seen various strategies used by companies to ensure that employees who are being let go continue to view the organisation positively and remain brand ambassadors for years to come. Apart from the financial compensation associated with redundancy, companies should also think about the other softer aspects associated with the retrenchment.

A common theme amongst all the strategies, is ensuring that there is a fair and transparent process to handle the employees’ exits. Some of the critical aspects of ensuring that the process is perceived to be fair are;

  1. Communication – One of the most critical aspects of handling the exit well is to have an effective communication process in place. Having a frank and honest conversation with the employees about the reasons for the retrenchment will go a long way to ensuring that trust is maintained.
  2. Timing – in the case of a redundancy or retrenchment exercise, giving an employee sufficient notice is vital to ensuring that they maintain some goodwill towards the company.
  3. Support – if at all possible, helping employees find alternate employment either through informal networks or where possible through outplacement services helps minimise the pain of the transition. Many companies also provide access to coaches to assist employees during their transition and help them get over the immediate shock of the retrenchment to focus on their next opportunity.

Managing the narrative with external stakeholders as well as the perception amongst consumers and competitors is equally important to handling a large retrenchment well.

Competitors will use the period of uncertainty created by the retrenchment to try and poach talent. Given the general uncertainty created within the organisation during a retrenchment exercise, employees are particularly vulnerable to an approach at this time, and it is important to ensure that the employees being retained are reassured during this time.

The image of the organisation amongst customers and the general public is also important to manage during the retrenchment process. For example, it may be better to have one significant round of retrenchments rather than multiple smaller rounds given the potential for bad news to keep circulating in the press.

We have assisted a number of organisations who have planned to downsize by engaging with the employees who are being let go to see if alternative roles can be found for them. Regardless of whether these efforts bear fruit, these initiatives have helped maintain the organisation’s brand and eventually allowed them to continue to attract good talent despite their short term challenges.

If you find yourself facing these challenges, please feel free to reach out and we can discuss how we may be able to help.

This article is written by Nikunj Shah, former founder and CEO of Datum Recruitment Services, and now founder of Select Global Solutions. 

Select Global Solutions provide Executive Search and Recruitment services to clients across Africa, India and the Middle East. Over the last 10 years we have developed an expertise in multi-cultural recruitment of senior talent across multiple industries. We specialise in sourcing both expatriates and nationals. To find out more about our talent acquisition solutions, get in touch with us at [email protected]