Business bankruptcy can involve intentionally restructuring a business. Executives and business owners often focus on immediate financial challenges when deciding to restructure and may fail to account for secondary challenges that could potentially arise during that process.
Restructuring means making changes to the company’s operations. There could be some downsizing that occurs. The desire to control financial expenditures may mean a temporary freeze on hiring or wage increases for existing staff members. The restructuring process can make workers feel very insecure about their future employment options.
Anxious workers are more likely to leave a company
Restructuring often costs a portion of the workers at a company their jobs. Sometimes, companies end up closing despite attempting to restructure. Other times, they downsize aggressively, eliminating dozens of jobs at the company at one time.
Employees are often very anxious when they learn that a company intends to restructure. They naturally worry that the restructuring could affect their job security, so many of them will start looking for employment elsewhere. Those preparing for a business bankruptcy or planning a restructuring effort may need to engage with employees to reduce staffing challenges during the restructuring process.
How can a business retain key workers when facing financial challenges?
Let workers know they are a priority
Workers do not want to lose their jobs with little notice or go unpaid because a company does not have the resources to cover their paychecks. Organizations may need to recommit to their staff members by communicating with them about restructuring and how the company will make payroll a top priority throughout the process.
Executives and managers may even need to target such efforts by focusing on specific employees. Renegotiating contracts with key workers can help ensure that a company has the right talent on hand during restructuring and after the completion of the process. Offering retention bonuses or putting together a plan to reinvest in employees as the company’s finances improve can motivate workers to stay at the business. Recommitting to a practice of promoting from within as vacancies arise could also give workers an incentive to stay at the company during difficult times.
Being proactive about retaining adequate staffing can reduce the negative impact that restructuring can have on an organization.