When it’s time to go

Peter Switzer

Retrenching staff is a difficult but necessary part of owning a business. If you need to tell an employee it’s time to go, make sure you’ve ticked all the boxes and that the day holds no surprises.

Remember that you’re walking in a difficult area here. It’s essential to follow the rules and seek advice from an employment law specialist. You need to be absolutely clear on the legal and industrial requirements before you retrench an employee. Also consider the industrial relations area in terms of proper consultations with unions and so on.

Legal and industrial considerations also include financial arrangements, such as retrenchment entitlements and final payments.

How to begin

Be brief and to the point. The employee will intuitively know that something is going to happen, so don’t make them wait. For example, the opening communication could be something along these lines:

“A decision has been made to cease the manufacture of consumer goods due to lack of demand. This has impacted on our required staffing levels and I regret to advise that your position has been made redundant. As there are no other suitable roles for you within the company, I must advise you of your retrenchment from the company, effective from next Monday.”

This kind of explanation is direct but respectful. The important point is to keep the discussion to a minimum. Don’t engage in any negotiation with the employee. The business decision is regrettable, but final.

Gentle and sympathetic

Gentle and sympathetic is often a difficult blend to achieve. The best approach is considerate and respectful, but direct. A well-planned process will demonstrate respect for the individual.

Display empathy, but don’t use words like, “I know how you feel” or, “I’m really sorry about this”. These sorts of phrases can really inflame the situation and the employee can often retaliate.

What not to do

You’ll hear of some big no-no’s when it comes to making staff redundant. For example, retrenching staff via e-mail, or worse still — SMS. That is certainly not a respectful process. To demonstrate consideration by delivering the news face-to-face is very important. If that’s not possible, make sure a telephone hook-up is arranged.

The other important thing here is to make sure everyone affected by the dismissal hears the news personally. Ensure they don’t hear it on the company grapevine or by way of communication from the IT department that their log-ons have been deleted, or something similar which often occurs.

Choosing the right time

In days gone by, retrenchments were done on Friday. Current thinking is that there’s certainly no perfect day to retrench any employee, but Friday would have to be the worst day.

The weekend doesn’t allow employees to engage with any support services that may have been retained for them, so my suggestion is for early in the week. This way, the employee can seek available and appropriate support and advice, whether it is personal, financial, or career related.

Choosing the time to leave

Once you’ve retrenched an employee, do you advise them to leave on the same day? This really depends on the business circumstances. The business should drive that, and in some organisations, it’s quite appropriate.

Long periods of remaining at work after being told of their retrenchment, however, can cause employees stress. They often find it difficult to focus on the job at hand. Most employees like to have the opportunity to close off a few work issues and say their goodbyes in a respectful way and that can normally happen within a day or two — so if the business can sustain that, it is a good idea.

Nevertheless, the business does need to assess the risks and that may sometimes mean an immediate departure.

Support the retrenched

Placement support is invaluable in being able to provide immediate and ongoing support to the affected individuals. Outplacement firms assist them in dealing with their reaction to the news and work with them to support their career planning and job search.
 

It is also a great support for the business manager or owner, as the outplacement firm can assist in the planning and implementation of the retrenchment process.

Notifying suppliers and customers

The way in which retrenchment is handled sends a very strong message to customers — and that needs to be the focus of a separate strategy. This is an often-overlooked area.

A separate communication and notification strategy needs to be developed to address the customers. Obviously, the plan will depend on the number of retrenchments and the types of jobs affected.

It is appropriate to advise key accounts of staffing changes and, if there are large-scale changes, it may be appropriate to communicate the business reasons for the changes to reassure customers that the business values the relationship.

Dismissal due to poor performance

Poor performance dismissal is very different, as it relates to the individual and their performance in their job responsibilities. Retrenchments are really position related, so it’s the job that’s becoming redundant.

So the process for poor performers is quite different and you should be well informed and advised by a professional about due process in that area.

Where to find out more

• Managing poor performers

 

More advice

• Read more practical advice on hiring, firing & managing.

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• Important information
  As this advice has been prepared without considering your objectives, financial situation or needs, you should, before acting on the advice, consider its appropriateness to your circumstances. All products mentioned on this web page are issued by the Commonwealth Bank of Australia; view our Financial Services Guide (PDF 59kb).