Difficult times: checklist for retaining and motivating redundancy survivors

Sue Nickson of Hammonds LLP continues a series of articles on dealing with difficult times with a checklist for retaining and motivating employees who remain after redundancies have been made. Ways in which staff motivation can be enhanced include good communication, offering more flexible working patterns, providing an employee counselling service and increasing the level of staff training.

1. Recognise the need to motivate retained staff.

When redundancies are inevitable the immediate priority is usually dealing with the employees who will be losing their jobs. However, once the redundancy process has been completed, an employer's success in retaining the remaining staff and maintaining their motivation will have a significant impact on its effectiveness in an increasingly competitive market.

2. Communicate both before and after the redundancy process with all employees, including those who are not being made redundant.

Communication with all employees is essential both during and after the redundancy process. During the redundancy process employers should develop clear two-way communications and keep all employees fully updated on the situation. Employers should also provide an overview of future job prospects and details of any changes in working arrangements that may arise because of the reduced number of employees. Once the redundancy process has been completed, employers should present a forward-looking, positive attitude for the future and show the remaining employees that they are valued and form part of that future. Where necessary, employers should also conduct individual discussions with key employees to reassure them about their future and help to gain their commitment.

3. Ensure that managers have, or are given the opportunity to develop, the skills to operate effectively.

During any period of change, managers play a key role in the retention and motivation of the remaining employees. They have to pull together new teams and implement new working practices. It is therefore essential that they receive the full support of senior management, together with the necessary training to enable them to deal with issues raised by the remaining employees. The skills training required following a reorganisation may be broader than that needed to deal with the usual day-to-day management issues such as absence and bullying. For example training for "soft" skills like counselling and mentoring may be more appropriate.

4. Consider new ways of engaging the remaining employees.

Employees who feel engaged by their employer are more likely to be both committed and productive. Employers should consider what the remaining employees value and new ways of engaging them. If salary and benefits are highly valued, there are a number of low-cost alternatives to salary increases that might be acceptable and boost employees' engagement. For example, employees may welcome the opportunity to:

• work more flexibly, therefore the right to request to work flexibly could be extended to all employees rather than limited to those who qualify for the right under the statutory provisions;
• buy or sell additional holiday;
• access discount retail schemes (for example through a pre-pay card enabling them to purchase discounted goods at a range of retailers); or
• take study leave or a secondment.

Another low-cost and potentially cost-saving way of increasing engagement is to offer employees the opportunity to work from home. This can save direct costs, for example office space rental and heating, as well as boosting employees' morale by giving them greater control and flexibility over their working day.

Salary sacrifice schemes are another potential way of improving employee engagement. Employees agree to a reduction in their gross salary in exchange for a benefit like childcare vouchers. The advantage of these schemes for employees is that the sacrificed amount is not usually subject to tax and national insurance. Employers also gain by not having to pay national insurance on the sacrificed amount.

Finally, it can only help employee engagement - at no cost to the employer - to remind employees of the value of the existing benefits that they receive. Many employees focus only on the "headline" salary and overlook the value of non-pay benefits, for example employer pension contributions and health insurance.

5. Develop a strong employer identity and culture.

The departure of a significant part of the workforce will potentially leave a void within a company or organisation. Having a strong employer identity and culture can help to give the remaining employees a sense of belonging. This can be achieved in a number of ways such as involving, as far as possible, all levels of staff in the decision-making process (thereby creating a "one team" approach) or organising staff away days so that employees who may not have worked together before can have the opportunity to get to know each other. Employees who have met their colleagues are more likely to work well together and be more productive as a result. Employers might also consider getting employees together for regular team meetings as a means of promoting team spirit and employer identity and culture. Both away days and regular team meetings allow an employer to promote its objectives and values in a controlled environment.

6. Ring-fence training budgets.

In any organisation seeking to cut costs, the training budget is inevitably one of the first to come under scrutiny. However, training and development is essential for staff retention and engagement and the need for training is likely to increase rather than decrease post-reorganisation. For example, managers may need change-management training (see above), employees given new or increased responsibilities may need additional technical and/or management training, and employees who moved to alternative roles to avoid redundancy may need training in new skills. Employees who feel that their skills are being developed are more likely to feel valued and are less likely to leave. In sectors where there are skills shortages (eg engineering and healthcare), providing training can also be an effective way of avoiding losing valued employees to competitors.

7. Consider introducing loyalty bonuses for, and/or promoting, key employees.

In an uncertain economic climate, loyalty bonuses and promotions can help to stabilise the workforce. Loyalty bonuses should be linked to specific performance criteria, which could include objectives for managers such as keeping staff turnover down. Employers may identify key employees to whom they wish to make additional payments during a transition period following redundancies, for assisting in the final winding-down of a specific part of the business.

Promoting an employee can be a relatively low-cost way of improving his or her feeling of self-worth and provides a welcome sign for the employee of the employer's commitment to him or her. Promotion may help to ensure the employee's ongoing commitment to the employer.

8. Remind employees about available counselling facilities.

Employees who remain after redundancies are likely to have increased workloads and may suffer from stress as a result. Many employers provide employees with access to a confidential counselling service and there is nothing to lose in reminding employees of its existence both during and following redundancies. Having such a service may help employers to avoid work-related stress claims from the "surviving" employees. However, employers should note that, in Dickins v O2 Plc [2008] EWCA Civ 1144 CA, the Court of Appeal made clear that if an employee tells his or her employer that he or she is suffering from stress and cannot cope, it is not an adequate response merely to tell the employee to seek counselling.

9. Mind your manners!

It is self-evident that employees who feel that they are being treated with respect will be more motivated. Although managers who are working in an environment where redundancies are being made may be stressed and fearful, it is important that they do not vent their frustration on staff. Employers should deal with any incidents of rude or abusive behaviour by managers or staff through the disciplinary procedure, although in some cases the circumstances may be treated as a mitigating factor.

Next week's article will be FAQs on dealing with difficult times and will be published on 24 November.

Sue Nickson is Chief Operating Officer, Partner (Employment) and International Head of Human Capital at Hammonds LLP (sue.nickson@hammonds.com).

Further information on Hammonds LLP can be accessed at www.hammonds.com.