Restructuring: 3 mistakes every business owner needs to avoid

Published 16 April 2024 | 3 min read

Restructuring can be a painful process for any organisation. The urgency to cut costs often drives decisions that inadvertently harm talent retention and long-term productivity.

Quite often we see businesses losing their best and brightest employees, reduced investment in remaining staff, and a depleted workforce struggling to meet future demands. This pattern can amplify organisational challenges rather than resolve them.

3 mistakes owners make during a restructure

Short-term cost cutting

Organisations often focus solely on immediate cost reduction without considering the long-term impact on talent retention and organisational capability.

Talent erosion

We're definitely seeing the most employable staff taking voluntary redundancy throughout New Zealand and not just public sector either.

If leaders are honest, some roles and functions are more essential than others and by allowing the most employable staff to exit voluntarily, organisations risk losing critical skills and experience, which can hamper future productivity.

Cutting everyone off at the knees 'equally' by reducing the workforce by a fixed percentage, or applying an across-the-board hiring freeze is not responsible restructuring.

Lack of investment in remaining employees

Discontinuing development opportunities for remaining employees can lead to disengagement and reduced performance.

What's a responsible way to approach restructuring?

Consider offering part-time work as a fundamental component of your restructure strategy. This could not only save costs but also retain valuable talent and boost overall workforce well-being.

Instead of conventional restructuring methods, consider integrating part-time work into your strategy, look at streamlining efficiency through the various software the organisation uses, using outsourced freelancers for specialist work, or 

Restructuring doesn't have to be a painful, inefficient process. Embrace responsible restructuring by offering part-time work options to your employees (keep hold of your talented employees).

This approach not only demonstrates compassion towards your workforce but also fosters a healthier, more productive organisational culture.

Whether you're a manager, owner or HR, avoiding common pitfalls and adopting some innovative methods can help navigate a restructure, building confidence and success.

Considering a restructure?

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