1. prepare the personnel restructuring thoroughly.
It is not uncommon for planned organizational changes to become public at a stage in which the company's shareholders and management discuss the need for and dimensions of the potential measure. A communicative worst case, which regularly puts the management on the defensive vis-à-vis the works council and the workforce.
In order to avoid falling into this trap and to maintain the performance of the organization throughout the entire transformation process, the following five measures are important:
First: If possible, do not involve employees outside of management
The more employees are involved in the personnel restructuring, the greater the risk that information about a planned measure will become public all too soon. Especially when it comes to a strategic realignment or an earnings crisis at the company, the options are many and varied.
When developing potential options for action and assessing opportunities and risks, the management should consult with experts outside the company. Their specialist input in particular should be used for the subsequent consultation processes and internal communication.
Secondly: develop a rough concept
Since the Betriebsverfassungsgesetz stipulates that the works council must be involved at an early stage in order to be able to influence the planned measure, the reasons, objectives and the rough concept are sufficient for initial information.
Thirdly: manage risk
In a company, organizational changes can involve various elements and restrictions. It is not uncommon for a necessary increase in personnel in unaffected business areas to be accompanied by a reduction in personnel elsewhere in the company for reasons of strategy or personnel costs.
If the company does not want to damage its employer image, avoid unwanted fluctuation and continue to be able to recruit talented employees without restriction, communication and personnel policy measures must be taken into account.
In the event of a shutdown, orders often have to be processed until the last day. Various measures must also be planned in advance to ensure that this is done within the respective time and quality requirements. Therefore, potential risks and measures to avert risks in the transformation process must be defined at an early stage.
Fourth: Develop a communication strategy
The development of communication goals is based on the corporate strategy and the specific cause and risks to be averted. An important goal will be to ensure transparency and willingness to change internally. The need to save on personnel costs, for example, and the associated goals must be communicated clearly and comprehensibly in order to create a sense of unity during the change phase.
Fifthly: plan milestones
A staff restructuring is divided into four phases:
- Vorbereitung
- Verhandlung
- Implementation
- Stabilization
A common mistake is, to start the negotiation and implementation phase as quickly as possible and to want to bring the measure to a swift conclusion. Working out the effects of complex transformation measures for the upcoming negotiation phase in particular takes time.
Incomplete documents that are difficult to understand and incorrect can have a chain of negative consequences: Negotiations drag on, conflicts become more emotionally charged and contentious, and the negotiation fronts harden. Milestones should therefore be planned realistically.
A second aspect should also be taken into account when planning the timeline: The works council must also be able to understand correlations that the management has been thinking about for weeks so that it can develop its own proposals. This takes time, as does the negotiating committee's process of winning over all works council members for a solution with the employer. A works council that feels under too much time pressure often reacts emotionally and withdraws to legal formalities instead of taking a solution-oriented approach.
2. Develop alternatives to harsh staff cuts.
The development and evaluation of possible alternatives to the planned measure in the run-up to negotiations, with the aim of reducing the size of the workforce to be cut, also increases the speed of negotiations and shows the works council that the management is interested in socially acceptable solutions that are the best possible for all parties involved.
It should not be forgotten that the development of alternatives and target group-oriented solutions largely avoids harsh redundancies. This is because there are many risks involved. An incorrect social selection or an incorrect mass redundancy notification can lead to the successful contestability of a dismissal by the affected employees and thus to high costs.
This is where diligence is particularly important!
Possible alternatives include general reductions in personnel costs and the further development or training of affected employees with the aim of continuing employment in vacant positions. A mix of HR policy instruments and socially responsible staff reductions offers a wide range of options and can help to implement the planned changes quickly and quietly.
Reducing personnel costs
Personnel policy alternatives or additions that you can use to reduce personnel costs include
- short-time work, if the restriction of operations is temporary
- Reduction of temporary agency work and temporary staff
- Expire fixed-term contracts
- Pre-retirement schemes and pension bridges
- Reduction of working time accounts and compensatory time off
- Adjustment of working hours, for example through shift models, reducing the volume of working hours and avoiding regular overtime
- Temporary reduction of special payments and/or bonus regulations
When developing these proposals, the collective agreement and company regulations as well as the employment contracts must be checked for feasibility in advance.
Use opportunities for socially responsible redundancies
In addition, there are opportunities for socially responsible redundancies, such as an approach and volunteer program and the use of a transfer company. Particularly in the event of a plant closure, time (remaining in employment subject to social security contributions) is often worth more than money (severance pay) for the employees affected. This applies in particular to middle-aged and older employees who only have a short notice period due to their short length of service.
The available social plan volume can provide the affected employees with the best possible security in their reorientation through a clever combination of individual benefits.
3. Bring negotiations with the works council to a swift conclusion.
Every month that the company takes longer to work out a solution with its works council increases costs unnecessarily. You should therefore set yourself the task of negotiating quickly, which you can achieve with these three measures, for example:
First: Describe the reasons for staff adjustments in detail
The primary goal of works councils is to avoid redundancies wherever possible. They therefore take a very close look at the reasons and the planned measures - often with the support of union representatives and an external consultant.
Employers who describe the reasons for their personnel adjustments and planned measures comprehensibly and in detail at job level before the start of the information and negotiation phase put their works councils in a position to quickly understand the measures and take a qualified position on instruments such as cutbacks, short-time working or layoffs.
Secondly, ensure that the data used is up to date
Care should be taken to ensure that the data used is up to date. The employee representatives will check the plans. If the documents are not transparent, data is incomplete or even incorrect, this will lead to unnecessary delays and even annoyance on both sides of the table. With up-to-date data, queries can be reduced to a minimum and unnecessary rounds of negotiations can be avoided.
Third: Negotiate respectfully and professionally
Works councils want to be recognized in their role and live up to their responsibility towards the workforce. If they experience appreciation and professionalism in the process from the management, they usually receive support in the implementation process.
Works councils regularly use all the legal means at their disposal to deal with a lack of professionalism, disdain and time pressure from the employer. In most cases, they can rely on the support of the workforce. This exacerbates the crisis through productivity losses, delays in implementation, sometimes lasting several months, and avoidable costs for lawyers, consultants and legal disputes, driving up overall costs.
4. Develop adaptation qualifications.
It is not uncommon for the reason for staff restructuring to be a change in the business model. In this case, jobs are eliminated while new jobs with changed job and requirement profiles are created. It is therefore necessary to check in advance whether and how employees affected by the loss of their jobs can participate in further training in order to avoid redundancies.
In addition to qualified job and requirement profiles, the basis for this check is an analysis of the qualifications, experience and skills of the workforce to be included. Ring fences should also be included in the considerations here. The competencies required for the successful implementation of the new strategy can be derived from the changed corporate goals and the new strategy. A competence diagnosis helps to objectify the decision as to whether an employee is fundamentally suitable.
In addition, the matching of target and actual profiles allows the need for further development to be precisely defined. Planning for further training and subsequent induction can thus be optimized. This does not necessarily involve expensive seminars. In-house development, for example through an expansion of operational tasks and a mentoring program, can also be sufficient - without incurring significant costs.
5. Fill vacancies in accordance with social selection.
When filling alternative vacancies, the social selection must be taken into account if the employee is equally suitable. The vacant positions are offered to the respective employees - also as part of a dismissal with notice of change.
In this way, costs for redundancies on the one hand and recruitment expenses on the other can be reduced. The company also retains a motivated employee who enjoys their work and can continue to use their internal network and relationships with customers and suppliers. Productivity restrictions can thus be reduced.
6. Stabilize the company.
Inadequate employee support after the implementation phase leads to problems and frustration not being recognized. This can lead to undesirable fluctuation and thus to a weakening of performance.
Whether planned qualification measures are sufficient can only be determined after the go-live of the new organization. Readjustments are often necessary. And this is also a task for which you should prepare your managers.
In the stabilization phase, it is also important to continuously promote the required identification of employees with the company and to monitor implementation. You should keep an eye on two questions in particular:
- Are the new processes being applied?
Is everyone working within the new structures?
You therefore need to develop your communication strategy beyond the end of the implementation process and motivate the workforce by, among other things, reporting on the achievement of action targets in order to counteract a slump in productivity.
