Why Midsized Businesses Should Prioritize Employees During Restructuring

Why Midsized Businesses Should Prioritize Employees During Restructuring

This article was updated on Aug. 27, 2018.

Strong employee reactions to restructuring can be normal at midsized organizations. If restructuring is necessary to reach your overarching goals, you may need to first evaluate engagement and strategize to ensure restructuring doesn't negatively impact your workforce.

Employees at midsized organizations could be especially sensitive to changes. Midsized organizations are in a unique position when it comes to restructuring and talent acquisition, where they're established enough that change can come as a surprise and still small enough that a new hire or shifting of roles could be felt by the entire organization.

Here's how to prepare for employee reactions to restructuring:

1. Get Ahead of Negative Individual Factors

Even if your organization will not be shedding roles while restructuring, you still could face a net negative reaction. Research published in the Journal of Work and Stress found that restructuring has a "mainly negative effect on the welfare of employees regardless of whether there are job losses." While the data is disconcerting for midsized HR leaders and business owners, it's important to note that organizational efforts at change management do have a positive effect.

It's no secret to HR leaders that one employee's fears can quickly turn into widespread rumors that restructuring will result in job losses or any number of baseless scenarios. According to research from the Journal of Work and Stress, the biggest individual factors related to negative perceptions of change include

  • Job insecurity
  • Employee adjustment
  • Perceived impact of change

It's important to communicate face to face when possible to assuage individual fears. By turning communications into individual dialogues, you can assure your employees that their feelings and opinions matter and answer any pressing questions before they devolve into rumor.

2. Involve Employees in Change Design

Employee involvement is a key factor in happiness, especially as far as change goes. More specifically, the greater an employee's participation in the scope of their role post-restructuring, the higher their satisfaction level will be. But you can't just force change, because if you try, you're likely to find resistance or devastate your engagement efforts.

Instead, HR leaders should work with management teams to make a compelling case for restructuring, which is often called a "change story" in the change management domain. Middle managers and direct supervisors should facilitate solution design and encourage active involvement from employees.

3. Build Trust

Building trust is critical during times of change. Midsized HR leaders may have an edge over their peers in larger firms when it comes to trust, which is often correlated with the strength of relationships. When restructuring, transparency is key.

Midsized Businesses and Restructuring

If your organization's profits have stagnated, you're utilizing your existing talent resources poorly or you're competing in an evolving industry, you may be overdue for a restructuring. A solid basis for change management and employee communications can help your organization avoid stagnation or employee resistance.

Restructuring is simply a tool for reaching your goals, but one that has the potential for significant impact on your employees. Factors behind employee resistance to change initiatives and restructuring can include:

  • Lack of vision
  • Ineffective change management teams
  • A lack of a clear ending
  • Compensation for adoption

Restructuring can be a necessary tool for midsized organizations to take their business in a new direction or course correct a failed initiative from the past. HR leaders should note that their organization can be especially sensitive to negative change reactions among the employees during times when your organization is in flux. By adopting an employee-focused process of change management, you can reduce your risks of disengagement and help make the transition as smooth as possible.