Five things to consider if you have to downsize your team

Thursday, 27 August 2020

Making people redundant is a difficult and stressful task for anyone. In larger organisations, HR is usually responsible for telling someone that they are about to be let go – but in a smaller business that task can often fall to the business owner, a part of the entrepreneurial journey that many are unprepared for.  

 

Whether you’re restructuring or downsizing, it’s an action that comes with a human cost, and many entrepreneurs feel a sense of responsibility for employing someone and then having to curtail their future in the company, especially if they are a high performer.  

 

During these difficult circumstances, leaders have the ability to make a huge difference in helping people to cope with what can often be one of the biggest personal and professional challenges they’ll face. We look at five key things for entrepreneurs to think about in order to support their employees and themselves effectively through this type of disruption. 

  

Captain the ship 

As the business leader, it’s your job to ‘captain the ship’, and in difficult times like those requiring redundancy, your employees will look to you for effective and decisive leadership. Clarity is key. People need to understand what the current situation is, how it affects them and what the next steps are – and as you are the bridge between them and that change, this is no time to be rickety. As an entrepreneur, you might have built your teams from scratch while growing your business and that can make it feel very personal when you’re in a situation of needing to let people go. However, you will need get comfortable with ‘stepping back’ and delivering tough feedback in phases when the business isn’t thriving. Ultimately, redundancy is a business decision and a good leader will always tell their employees the truth – even if it isn’t good news.  

 

Do: Remember redundancy is not personal. It’s a tough but strategic business decision that is taken for the survival and future growth of your company.  

Don’t: Shy away from making difficult decisions and being direct with people – tough times require clear and courageous leadership. 

 

Dealing with their reaction 

Redundancy can shatter confidence and make people question their abilities, skills and professional value. Someone facing redundancy will ask ‘why me?’. It’s essential you’re able to give a solid rationale for the decision and one that focuses on business pressure and not on them as a person, and to clearly communicate what support they’ll receive and what the next steps are. In stressful situations nerves can make people speak too much – but listening is the crucial skill here for respectful and compassionate management.  

 

‘Losing a job is a huge adjustment and it’s normal to experience a range of emotions. We may feel shock, anger, resentment, relief and much more all in a short period of time,’ says a spokesperson for UK mental health charity, Mind. And emotions may not be shown immediately – it’s not unusual for reactions to come out later as the news is processed, so don't shy away from your employees afterward. Stay visible and make yourself available if people have questions or grievances, admitting that you don't have an immediate answer if necessary. It’s better to say, ‘I don't know, but I’ll find out for you as soon as possible’, than have employees feel they can't approach you.  

 

Do: Be direct, keep it simple and stick to the facts – overly complicated messages will only confuse people and create more psychological upheaval. 

Don’t: Make assumptions about how someone is going to respond. Don’t assume they’ll be fine, or that they were probably expecting the news anyway. 

 

Dealing with your reaction 

Making someone redundant is never going to be a pleasant experience, but shrinking from its challenges will only make things worse. Get comfortable with being uncomfortable and doing what needs to be done and in the most compassionate way you can. It is your job to stay human but also have and deliver a clear and consistent leadership message and although you might struggle with a sense of failure and guilt about letting your workforce go, don’t introduce emotion into the situation. You are likely to be making people redundant in a state of anxiety over the future of your business. Once you have delivered the news, give yourself an opportunity to take a breather before returning to your desk, and work on building your own resilience through the change with self-care. That means getting enough rest and staying hydrated, releasing tension through meditation and reaching out to your network for practical or psychological support.  

 

Do: Take time to learn techniques to help you remain calm during stressful situations – and focus on your own emotional wellbeing, as well as that of your employees. 

Don’t: Be tempted to stray into informality – even if your company is small or you’re close to your team members, it's crucial to stick to the leadership message and keep things clear and simple. 

 

Talk to your team 

Making redundancies impacts everyone – the person in question, you as the employer, but also your wider team. Those not being made redundant will often have a sense of ‘survivor guilt’ as well as uncertainty about their role in the business further down the line. This can unsettle the office dynamic and if not addressed can even lead to people handing in their notice. Ensure that everyone is provided with emotional and professional support when the news is delivered – verbally as well as in writing so that it can be referred to later. And importantly, provide everyone in your organisation with time, space and appropriate support to process the news, doing your best to answer all questions with transparency, while being honest if you don’t know the answers yet. 

 

Do: Think about everyone involved directly and indirectly. Manage the message so that those affected understand and feel supported, and those who aren’t affected understand and can support.  

Don’t: Let the people who are being made redundant be the last to know. Avoid gossip taking hold by acting quickly and respectfully to clarify the situation for your employees. 

 

Bouncing back  

When things are difficult it can be hard to remember that you will get through this period. Entrepreneurs are, by nature, often optimists, and finding yourself in a difficult space can knock your confidence. Don’t compare yourself to other businesses and don't dwell on any perceived ‘failure’. Even the most successful businesses have met challenges in their life cycle, and in all likelihood that included downsizing at some point in order to be able to carry on and eventually grow again. Determination and the courage to push through it – and a sense of perspective – will help you to hold a difficult space, while allowing you to recalibrate for the future.  

 

Do: Keep perspective. This is a storm, not the regular weather, and you will come through the other side. 

Don’t: Deny the pain you might feel over having to make employees redundant – staying compassionate while delivering effective leadership is key to managing this transition successfully.