Issues and crisis management: Communicating redundancies

Some staff at Woolworths only found out they were losing their jobs when they read about it in the papers. Claire Weekes looks at more appropriate ways to break bad news

Poor practice Woolworths was criticised for its lack of communication with staff
Poor practice Woolworths was criticised for its lack of communication with staff

With the recession showing no sign of abating, scores of companies will this year face the tough task of telling staff they are no longer needed. For PR professionals, this dramatically increases the chance of being landed with a brief to be the bearer of bad news.

When faced with the task of helping your own, or a client’s, organisation through such a process, there are a number of key things to consider; how to handle media interest, how to help soften the blow for employees and how to make sure other stakeholders are kept informed. Devising a strategy is a complex job, but there are a couple of basic points to keep in mind, advises Paul Sweetman, director of emp­loyee engagement at Fishburn Hedges.

‘Every organisation should put together a multi-functional team that embraces HR, operations and IT. Co-ordination is key. The underlying principle, though, is to talk to employees directly and before news breaks externally,’ he says.

‘The actions you take need to be managed very carefully, and often within hours of one another, so internal and external communications are synchronised,’ adds Eddie Bensilum, director at Regester Larkin. This could include town-hall-style meetings to make announcements to staff, at the same time as one-to-one meetings with people particularly affected.

And it is crucial that leaders stay visible and accessible to staff. ‘The danger is that sometimes leaders find the whole process scary themselves and retreat,’ warns Bensilum.

Consultation laws in the UK mean a business must enter a period of consultation if it plans to make 20 or more redundancies in a 90-day period. This adds complexity to the overall communications strategy, as the media could get wind lay-offs are imminent, without knowing the full det­ails. This is where inaccuracies in media reporting can flare up, and where a holding statement detailing as much information as the company can give is useful.

‘Sometimes it can be reported that 1,000 jobs are to go, but that’s not actually the same as saying 1,000 people will be axed,’ says Diana Soltmann, MD of Flagship Consulting. ‘The company may consider not replacing people when they leave, or voluntary redundancies. It’s crucial to exp­lain all of this in a holding statement.’

Tim Danaher, editor of Retail Week, adv­ises working with journalists to help them get the story right: ‘News journalists
exp­ect to pick up gossip, but we also have to be responsible where redundancies are concerned. We try to work with the companies inv­olved so we get our facts right.

‘It’s important for us not to be seen to be sensationalising redundancies. At a time when there are a lot of these stories about, we need to be seen to be putting them into context – we don’t want to revel in them.’

In fact, the news is now so full of stories of lay-offs and companies being plunged into debt that a clever PR opportunity can lie in highlighting the positive aspects of an otherwise seemingly bleak story.

Neil Bennett, vice chairman at Maitland, is involved in the current restructuring of embattled high street retailer, JJB Sports. He says it is vital to communicate success wherever possible in the midst of a redundancy crisis. ‘JJB recently sold its two corporate helicopters and we made sure that was known about,’ he says.

Encouraging a positive outlook does not just apply to external communications strategies. Keeping staff morale up when a workforce has just been slashed is of equal importance.

Soltmann explains Flagship Consulting encourages clients to circulate internal newsletters, to inform staff about new contract wins or great pieces of work. ‘In any period of redundancy, there needs to be a grieving period, where staff can digest what has happened, but then you have to move on and show those remaining that they play an important role.’

It is not just the current workforce that needs to be kept on-side after a spate of red­undancies. The strategy to minimise the impact on reputation may also involve reaching out to future employees.

‘Even during a recession, companies want to be seen to be good employers,’ says Alex Woolfall, head of issues and crisis management at Bell Pottinger. ‘The way to address that is to put out a message that says, we’re making adjustments to ensure a healthy future’’.’

‘Most importantly, make sure any communication plan is long term to keep staff motivated and focused,’ advises Bensilum. ‘At the end of the day, they are the future of the business.’


Case Study Woolworths (Nov 08)

The demise of high street retailer Woolworths last November has been well documented in the media – so much so that staff at its London HQ only found out they were to lose their jobs by reading the papers. ‘After they called in administrators Deloitte, we sat in our offices for days not knowing what was going on and just reading all these speculative stories in the press’, says one ex-employee. ‘Then one morning the headlines said that they were due to axe hundreds of jobs that day.’

On the same morning, Deloitte summoned staff to five separate presentation rooms to confirm the news. ‘When we asked why we’d had to find out through the media first, Deloitte apologised and admitted that somebody had leaked information.’

Deloitte admits it did tell unions that jobs were to go before it briefed staff. ‘On at least one occasion one of the unions leaked information. As a courtesy we pre-brief the unions before staff,’ says a Deloitte spokesman.

Andrew Worlock, head of internal communications at Insidedge, points out this is why joined-up thinking is key. ‘Staff would only have had HR people to turn to, and in this case the HR people probably didn’t know what was going on. The external press coverage would have just unnerved everyone even more, so all of the staff just ended up feeling lost. There is nothing worse than finding out about your future through the media.’


Case Study BMW Mini (Feb 09)

Earlier this month, union officials at BMW’s Mini Cowley plant in Oxford were pelted with fruit after disgruntled staff were told 850 jobs were to go.

Casual staff were laid off with immediate effect and the site closed for a week, with weekend working scrapped. BMW claimed weekend workers had effectively been given a week’s notice as they would be paid for the following weekend.
The company also said 150 workers at a plant in Swindon would be offered a transfer to Oxford.

Union bosses accused the car manufacturer of treating agency staff like ‘cannon fodder’ and the staff said they were furious they had been told an hour before the end of their shift that they were out of a job. Tony Woodley, joint leader of Unite, said it was one of the most outrageous ways of sacking employees ever experienced in the UK car industry.

Andrew Griffin, MD of crisis management agency Regester Larkin, says: ‘Agency staff are used for flexibility, and they are normally more expensive but quicker to hire and easier to fire. But with unions flexing their muscles and the media looking for victims and villains of the recession, it is a mistake for companies to think contractors can be treated less compassionately.

‘Mini did nothing wrong operationally, but the way it communicated made it an easy target for outrage.’


How to be the bearer of bad news A six-point plan

Neil Bennett, vice chairman at Maitland, offers this advice to companies facing redundancy crises:

1 Control information There is always a danger of leaks. Work to control the flow of information. Make sure only the official channels speak on behalf of the company.

2 Create a strategy In a crisis it is easy to get bogged down in dealing with daily events, but do not lose sight of the bigger picture. Don’t just focus on the poor trading figures that were announced today; focus on the two-year turnaround strategy too.

3 Know your tiers Split your stakeholders into categories – banks, suppliers, employees, shareholders and so on – and ensure you are equipped to communicate with each.

Create a rapid response unit Events in troubled companies change by the minute and there are plenty of things that can knock you off course. Have a system ready so that your core team can meet and make decisions quickly in an emergency – whether that be via conference calling, an email group or an intranet site.

5 Resource In-house staff working for until-now healthy companies may not have the right skills for the job.  In which case, call in experienced agency resources.

6 Create confidence: Show that you know what is wrong and you have a plan to fix it.

A crisis can strike at any moment and can take any form. Join us at PRWeek's annual Crisis Communications conference in London to learn exactly how (and how not) to react - click here to find out more.

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