Small Business Restructures – What You Need To Know

Following the pandemic some companies may be thinking of restructuring to be able to remain in business and remain competitive. It is essential companies plan for a restructure to ensure it will be achieved successfully.

A restructure is changing how a business is formed and arranged in terms of reporting lines, job roles and job content. Restructures can be required to ensure that the structure of the business meets the needs of the business effectively.

Restructures may take place when there has been a change in the marketplace, decrease or increase in customer demand, planned growth, new technology being introduced, moving to a new location, requiring a new business and changes in management.

Having a clear business case for the restructure is the first step, a business case can help to clarify the end result and identify the best ways to achieve this.

Sometimes a restructure can just be for an individual department and not the whole company, however changes to one department can often affect other departments.

Consideration should be placed on:

  • The need for the change;
  • Key issues driving the change;
  • Staffing gaps and skill shortages;
  • Internal and external factors;
  • Problems that need to be resolved.

Best practice would be to decide what you need the business to look like in the future and then you can start to work out how you will go about creating the change.

Jobs should be designed on what the business needs to be effective and not created around or based on the employees that a company already has.

Businesses may look at conducting the following:

  • Organisation design process;
  • Looking at and reviewing job roles, skills assessments, and job descriptions;
  • Changing the organisation structure.

Considering the options

Once the restructure has been decided and agreement reached on how the end result needs to look, the options available to achieve this need to be looked into. Businesses may look to gain external assistance and legal advice on how it is best to do this.

Options to consider:

  • Will redundancies need to happen?
  • Will we need to recruit more employees?
  • Can we retain all the existing employees?
  • Will we need to offer additional training or support to fill the skills gap?
  • Analyse factors including, cost, risk and time frames.

Restructuring of a business can be successful if the legal risk is minimised, if a restructure is planned carefully and all options considered before the process is started, then it is more than likely to be done right and meet the business needs for the future.

Communication

Restructures must be handled carefully and fairly for all involved, communication throughout each stage is key so that everyone knows the reasons for the change and why the change is happening. This is vital to maintain morale and employee engagement. Communicating the changes and the end vision gives people the relevant information and helps them to deal with and come to terms with the changes.

Employees need to understand why a restructure is taking place and the process that is to be followed to get the end result. If effective communication is not provided, people will fill the gaps and time with rumours and speculation. Even if the communication is bad news, it is better for employers to be in control of how this news is communicated than let rumours take over.

During a restructure it is important to acknowledge certain milestones and celebrate successes along the way. Things to celebrate and communicate include:

  • Savings achieved;
  • People in new jobs;
  • Efficiencies achieved;
  • Increase in customer satisfaction.

By celebrating successes, it will remind employees why the restructure was needed.

 

If you would like further guidance on company restructures or any other HR topic please contact Clover HR on 0121 516 0299 or email us at info@cloverhr.co.uk


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