Running a business is never easy. Sometimes, you realise that certain jobs in your company are not useful to your overall goal. This may force you to make the staff performing those roles redundant. Redundancy is the process of reducing your workforce if the jobs they do are no longer required.
The redundancy process in New Zealand is complex, as it requires careful consideration of all parties involved. When someone’s work is redundant, it causes losses to the company because they are taking up resources for tasks that no longer contribute to the overall aims of the business.
It often does not matter if the employee is a hard-working individual — if they are no longer needed, keeping them is detrimental to your business’ growth. Firing them is a difficult, but often necessary, process.
Unfortunately, redundancies can have a negative effect on your company’s morale. Your remaining workforce may feel uneasy, and this can affect the overall productivity of the company.
The Negative Effects of Redundancy on Morale
The act of making someone redundant can have a slew of negative effects on your company’s morale. While it is common to experience some level of unrest while reducing your workforce, there can be other problems as well.
Some of your employees may feel unhappy with the decision and think that the company is being unfair. Others may feel insecure in their own positions and worry that they, too, may be made redundant.
These negative feelings can affect productivity and creativity. Staff may become afraid to take risks out of a fear that mistakes could result in them losing their job. They may become less responsive to their customers. Some employees may even decide to look for a new job in a different company rather than risk unemployment by remaining where they are.
Honesty and Clarity May Help Preserve Morale
To help preserve company morale, you will have to take steps to build confidence amongst your staff. You must convince them that the redundancies were necessary and reassure them that their jobs are secure.
In addition, you must treat the redundant employee fairly — any news of unfair practices or mistreatment can backfire.
Be honest and clear, and you may be able to prevent your staff from becoming demoralised.