Avoid these 3 mistakes when restructuring your retail business.

This month as we see the end of the government wage subsidy, with some retailers being unable to access the wage subsidy extension, this may mean you are faced with some difficult decisions to ensure the survival of your business. Nobody wants to be reducing staff hours or making people redundant, but if you are looking at restructuring your business, this post will cover some common mistakes. We’ve also recorded our free webinar How to restructure your retail business, which you can watch for more in-depth advice.

There are three areas we recommend you take time to consider and prepare prior to announcing a restructure as getting these wrong could result in a personal grievance.

  1. No written documentation with your proposal

It is important that before you announce a proposal to your team you have a clear documentation so you can communicate the proposed changes to your team.

Your proposal should cover:

  • The reason for the restructure.
  • What you propose the new structure to be.
  • Impacts on the current structure.
  • Roles that are being disestablished or substantially changed in the proposed restructure.
  • Information to support the reasons for the proposed change.
  • A timeline for the process.

2. Not providing employees with an adequate timeframe

Remember that a restructure is a difficult time for team members and they need time to adjust and get the right support. A common mistake made when restructuring is wanting to move quickly and not giving employees enough time to seek advice and respond appropriately.

A restructure timeline might look similar to this:

  • Invite team members to a meeting to hear about the proposed restructure. Allow at least two business days between sending the invite and holding the meeting to provide time for the team member to organise their support person. Affected team members should be invited to an individual meeting before the wider business is informed of the proposal.
  • Explain your proposal to the affected team members and then the wider team
  • Allow at least a week to consult and gather feedback about the proposal. Where there is an immediate financial impact on the business, the consultation process can be shorter.
  • Allow a few days after you have received feedback to give yourself time to consider feedback and to make a final decision.
  • Confirm the structure in writing to all employees as soon as decision has been made. Affected employees should be met individually with their support person.

3. Basing a restructure on an employee’s performance

Any Business Change should always be about the positions and structure that is best for the operation of the business. It is important that you do not use a Business Change process in place of a performance based process for an employee who is under-performing. If you are having an issue with an employee’s performance, you need to manage their performance through the proper channels. For more information, see our business guide “Managing People”, free for Retail NZ members and $29+GST for non-members.

If you have any questions, ask our business advisors via advice@retail.kiwi or 0800 472 472.

By Kajal Lallu
Retail NZ

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