HR plays a crucial role in managing the highs and lows of organisational restructuring, providing support for employees impacted by company changes and ensuring processes remain steady.
By Simon Kent
Restructuring a business can be liberating and unleash new potential, but it can also be difficult for those involved. The reason behind the changes in the way business is done—or even in what business is done—can be difficult for the workforce to understand, may result in them being engaged in new activities and roles, and can even lead to redundancy. It’s an emotionally fraught time that is practically challenging, and HR is often in the middle, tasked with ensuring transitions run smoothly. But often, HR teams are not included in the discussion or strategy around why changes are being made.
“When an organisation undergoes restructuring, HR plays a pivotal role in ensuring the process is well-managed, fair, and as smooth as possible for everyone involved,” asserts Amanda Arrowsmith, people and transformation director at the CIPD. “People professionals provide essential support for employees impacted by change, whether that’s helping individuals transition into new roles, equipping managers to lead through change, or providing guidance and career support for those facing redundancy.”
Arrowsmith also notes that HR has a role in ensuring the process is legally compliant, ethically sound, and aligned with the organisation’s long-term goals. “Getting restructuring right is about more than just the process,” she says. “It’s about people, and HR is at the heart of making that happen.”
“People professionals provide essential support for employees impacted by change, whether that’s helping individuals transition into new roles, equipping managers to lead through change, or providing guidance and career support for those facing redundancy.” – Amanda Arrowsmith, CIPD
Unfortunately, HR is not always given the central role that should come with their responsibility. Change can come from a different area of the business with HR simply there to help make it happen. While noting this should not be the case, Lindsay Gallard, CPO, Six Degrees also highlights the skill level required to provide the right kind of support. “HR professionals shouldn’t just implement restructures, they should be among the first to identify the need for them,” he says. “This requires skills beyond classic HR functions, such as understanding the overall business plan, the specific numbers influencing restructures, and the business processes and key performance indicators.”
Gallard goes on to say HR should be able to identify potential efficiencies in roles and responsibilities; be financially literate enough to model costs and risks; and be able to effectively communicate and influence stakeholders based on the financial, practical, and human factors. HR’s role therefore goes beyond advising on “redundancy packages and taking notes in meetings” to being involved in defining a new operating model and reasons behind it, setting out and communicating the business case for the changes and driving the plan to conclusion for the company.
“HR’s attention to detail is vital at each stage of the restructuring process,” adds Gallard. “Initially, it’s about the operating model and communication plan, but as action begins, it’s about rallying the troops. Managing stakeholders involves ensuring all managers impacted by change understand the business case and communication plan. Leaders need to lead through these processes.”
Sarah Hernon, principal consultant at Right Management, describes HR as “the glue that holds everything together” and as such, communications will always take a front and centre place when restructuring occurs. “HR’s role is to check on how and when everything is being communicated, and to ensure the communication is effective and won’t be misconstrued by its audience,” she says. “HR is the subject matter expert that ensures the right communication and consultation is deployed at the right time.”
However, HR leaders need to go beyond this in order to truly look after people. Hernon warns against neglecting the mental health impact when change occurs and says HR must be ready to provide support services to ease the transition.
“HR must be mindful of the long-term effect on company culture,” Hernon explains, “as restructuring multiple times can demotivate employees and lead to ‘change fatigue’, meaning employees become exhausted and not receptive to change, if not handled with sensitivity and fairness.” Cases of “survivor syndrome” may also need attention, where employees feel guilty that they’re still in position or employed when others are not.
Being clear and direct about what the restructure means is paramount to making the process effective. Since HR is going to be steering employees into the new arrangements, it has to be convinced that those new arrangements are going to work.
Gallard emphasises the need to have a well-thought-through direction that underpins everything. “A business owes it to its people to develop logical, data-driven business cases that align with wider communications,” he says. “Honesty and integrity in updates are crucial to avoid surprises.”
“HR must be mindful of the long-term effect on company culture, as restructuring multiple times can demotivate employees and lead to ‘change fatigue,’ meaning employees become exhausted and not receptive to change, if not handled with sensitivity and fairness.” – Sarah Hernon, Right Management
Uncertainty and disruption are frequently the result—or at least side effects—of restructuring, and Gallard notes businesses may need to plan for possible impacts on time management, outputs, and even financial results. There will also be a sense of the time scales over which this impact will occur and by when things should be back on track—or better than before. “Changes in roles and responsibilities affect upstream and downstream processes,” he notes. “It’s important to document and communicate new expectations clearly to support performance management.”
At the end of the day, it is always HR’s role to ensure people are being deployed in an optimum way and to the best of their abilities and potential. As such, it may be that part of HR’s job is to help those who are no longer required in the new business structure to find something to move on to. “Businesses should consider retraining, repositioning, or outplacement support to retain talent and fulfil legal and moral obligations,” says Hernon. “However, significant strategic pivots or financial constraints may make this impractical.”
Comprehensive talent management and succession planning may not always be possible, but simply shedding talent will do little for the esteem in which exiting employees may hold their previous employer and crucially have a detrimental effect on the employer’s brand. Even CV assistance from internal teams or job-seeking support from external agencies can make all the difference here. With a little thought and consideration, restructuring can ultimately be good for everyone involved.
