Aligning Workforce Transformation with Business Restructuring

Business restructuring involves changing the operational, financial, legal, or other core processes of a company to increase efficiency and profitability. This can be in response to market developments, changes in the legal landscape of the industry, growth of the business, or a need for change becoming apparent. Most frequently, however, business restructuring is triggered by the company being in financial distress or accruing unmanageable debt. 

Allianz’s 2024 Global Insolvencies Report estimated an 11% increase in companies becoming insolvent from 2023-2024, and forecast this rate to continue rising until 2026. European countries had the highest numbers of businesses filing for bankruptcy, but the trends remain the same around the world. To deal with the challenges of insolvency, radical business restructuring is typically implemented- but what does this mean for your workforce?

Any reorganisation of a business- from mergers and acquisitions to divestitures to expansion- will mean changes for employees: changes in roles, responsibilities, tasks, and processes. There may be redundancies and layoffs, too, so staff will naturally experience anxiety and job insecurity around this. 

An open and collaborative approach is key to mitigating this and any associated negative effects on staff morale and mental health. By remaining transparent and inclusive- keeping employees informed, involved, and receptive to feedback- businesses can help turn potential uncertainty into a positive opportunity for growth and development. 

Approach employees with openness and transparency about the forthcoming changes and how they will be affected. Make sure to answer all their questions frankly, covering topics like what to expect, and what is the workforce transformation strategy. Offer context regarding the reasons for restructuring, and show empathy around the impact it will have on staff.

By providing support and resources for retraining, career development, and counselling to help staff deal with the change, you can help ease the transition, and frame the restructuring in a positive light. 

Restructuring offers the chance for career development as new roles and responsibilities develop, and can help streamline processes, enhancing efficiency and communication company-wide. Placing a proactive emphasis on staff well-being, and providing support and appropriate resources such as counselling and retraining opportunities during the restructuring period, is the best way to help employees adjust and thrive.

Workforce transformation refers to the strategic reallocation of staff, skills, and realignment of organisational structures in response to the changing needs of the business. When it occurs due to the company restructuring, a successful workforce transformation typically encompasses the following: 

• Talent Redeployment: Moving staff to different departments or placing them in different roles according to their skills and the new demands of the business.

• Upskilling, Cross-Skilling, and Reskilling: Offering staff comprehensive training opportunities to fully equip them to meet the requirements of their roles after the restructuring.

• Use of Advanced Software: Technologies like applicant tracking systems (eg. Yomly’s ATS software) can help match candidates to roles based on qualifications and skillsets and build talent pools to draw on in the future. Cloud-based human resources platforms can centralise processes and streamline the reorganisation of a company.

• Manage the Human Impact of Change: Business restructuring can radically alter the  work lives of employees, so handling this sensitively is essential. Clear communication and proactive transition strategies are imperative, as is offering support to staff during the transition period. As well as maintaining morale and engagement within the company, this can help overcome any resistance to change among the workforce.

These strategies will help seamlessly manage talent realignment during times of upheaval and change within the organisation:

• Fully Assess the Workforce in Advance: A thorough evaluation of the existing workforce before restructuring begins is invaluable for identifying which employees should be retained, retrained, or redeployed. Create skill inventories, performance evaluations, and look for any gaps in knowledge or training, then use these metrics to inform decisions in the restructuring process.

• Identify Business Goals, and Align Transformation Strategy to Meet These: A clear idea of the objectives of the reorganisation of a company, and tailoring the restructuring to meet these, can ensure success. Whether merging with another firm, pivoting to expand into new markets, or divesting a branch to cut losses, bosses and human resources (HR) departments should be clear on long-term goals and collaborate closely to achieve them.

• Prioritise Clear and Open Communication: Uncertainty breeds fear and damages staff morale, but transparency around the forthcoming changes within the business will help safeguard against this and foster an environment of trust and respect. Outline the reasons for and purposes of the restructuring, what changes employees can expect, and the support that will be available to them. 

• Implement Comprehensive Upskilling and Retraining Programmes: Equipping employees with the skills they need to transition into new roles creates an agile workforce and minimises disruption during restructuring. This will help the company retain talented staff and prevent skill shortages arising in key areas.

• Use Technology to Assist Workforce Planning: Artificial Intelligence (AI) modelling can provide insights into employee performance, skillsets, and potential career paths, helping efficiently streamline talent redeployment. Advanced Human Resources Management System (HRMS) platforms can swiftly match employees to roles based on qualifications, merit, and competencies, easily identifying the best person to meet business needs.

• Offer Comprehensive Support to Transition Employees: Restructuring can have a significant emotional impact on employees, especially if it entails changes in positions and role reductions. Coaching, career transition support, and outplacement services support the well-being of staff during this period of change while safeguarding the organisation’s good reputation. 

• Promote a Culture of Learning and Adaptability: An agile workforce that embraces and adapts to change easily is resilient and ideally placed for future success no matter the industry climate. Incentivising continuous learning and training, and fostering a culture that values innovation and progress, is the best way to position employees to thrive in the future.

When navigating any kind of organisational change, a workforce transformation that is aligned with the goals of the business is essential. A clear strategy when managing reallocation of talent can easily position businesses for a successful restructuring while retaining valued staff members and maintaining operational efficiency. 

For businesses going through change, advanced HRMS solutions can assist in a seamless workforce transformation and set the company up for long-term progress. Yomly’s HRMS software offers tailored support to realign talent and streamline the restructuring process. Get in touch with one of our team to learn how we can support you in achieving long-term success.