Don't shoot the messenger: The enigmatic impact of conveying bad news during redundancy situations

CIPD Applied Research Conference 2020

The shifting landscape of work and working lives Don’t shoot the messenger: The enigmatic impact of conveying bad news during redundancy situations and how to limit the impact Dr Madeleine Petzer, Liverpool John Moores University, UK

Conference paper

The view that ‘putting people at risk of redundancy is a horrible thing to do’ is a common perception among redundancy envoys. This paper highlights the significance of the negative psychological impact experienced by redundancy envoys during redundancy situations. Redundancy envoys for this purpose include: directors, management, employee consultative representatives and HR professionals. They are the individuals who normally assume responsibility for activities such as the strategy, planning, process, implementation, communication and consultations associated with redundancies, as well as dealing with the aftermath.

The findings from this qualitative study indicated that the psychological impact on redundancy envoys is significant. When describing the impact of implementing redundancies on their psychological health, the research participants spoke about their experiences with heartfelt emotion, tears were frequent and many envoys referred to overwhelming levels of stress that resulted in sleepless nights, medication, therapy, long-term absences and resignations.

The implications for practice are that organisations should recognise the detrimental impact of redundancy programmes on redundancy envoys. Organisations should thus carefully consider if the benefits of a headcount reduction strategy outweigh the negative impact on redundancy envoys and, if such a strategy is unavoidable, what interventions can be implemented to limit the negative consequences for the individuals and the organisation.

The accelerating pace of redundancies

To cope with increased competitive pressure, demand for cost savings and high performance, many organisations have come to rely on a range of strategies, such as globalisation of product and capital markets, work intensification (Burchell et al 2002), restructuring and redundancies (Macky 2004, Williams 2004).

Redundancy is not a new phenomenon; however, it should be recognised that the scope and pace of redundancies have accelerated in recent years (Baruch and Hind 1999). During the financial crash in 2008, the redundancy rate in the UK reached a high point where 12.2 employees in every 1,000 were being made redundant in the period of February–April 2009 (ONS 2020).

In early 2020, many organisations announced redundancies, including Anglian Water (Lodge 2020), HSBC (Bennett-Ness 2020), Southern Water (Brooke 2020) and Ted Baker (Nazir 2020), even before the outbreak of the COVID-19 global pandemic. Compounded with the effects of the pandemic, however, the scale of redundancies has reached phenomenal numbers, with up to 50 million jobs at risk globally in the travel and tourism industry alone according to the World Travel & Tourism Council (WTTC) (cited in Munbodh 2020).

At the time of writing, redundancies were still on the increase, despite the UK Government initiating the Coronavirus Job Retention Scheme to mitigate the pandemic’s impact on the workplace. This scheme gives businesses the ability to place staff on furlough leave, with the Government covering 80% of an individual’s wages, up to a maximum of £2,500 per month. It also enabled businesses to rehire employees who were made redundant after 28 February (provided they were on the payroll before that date) and immediately place them on furlough leave.

The total impact of the COVID-19 pandemic on organisations is still unknown, but it is anticipated that the scale of redundancies will continue to grow significantly. A recent joint survey from the CIPD and People Management magazine indicated that one in four organisations expect to make permanent redundancies due to the crisis (CIPD 2020). With the rate of redundancies still increasing, it is even more imperative for organisations to understand the characteristics of redundancy envoys and why they are critical for an organisation’s survival.

Victims, survivors and envoys: the impact of redundancies on the workforce

Redundancy programmes have a negative impact on the entire workforce. Those affected include the victims (the employees who leave), the survivors (employees who remain in the business), and redundancy envoys (those who assume responsibility for activities such as the strategy, planning, process, implementation, communication and consultations associated with the redundancy programme).

The impact on victims includes: • psychological stress • ill health • family and personal problems • reduced self-esteem • depression • helplessness and anxiety • feelings of social isolation • damage to career • loss of earning power • feelings of cynicism • uncertainty and decreased loyalty in future employment (Gandolfi 2008).

The impact on the survivors includes: • increased workload

• survivor guilt • survivor envy • anger • relief • job insecurity • managing higher levels of stress, absenteeism and mistrust • working in an environment with possible decreased work quality, morale and productivity • decreased employee involvement • decreased trust towards management (Gandolfi 2008).

The key focus of this research was to establish the impact of redundancies on redundancy envoys. Gandolfi (2008) and Noer’s (1993) research indicates that managers who are part of a redundancy programme quite often experience some of the same feelings as the survivors and victims. Torres (2011, p181) supports this by stating that the very real suffering of the redundancy envoy remains ‘unspoken and unheard’. The most recent research by Ashman (2012, 2016) agrees that redundancy envoys describe the experience as ‘traumatic, nerve wracking, dreadful, very upsetting and hideous’ (Ashman 2012, p9). With the limited research in this area and the growing scale of redundancies, the importance of gaining a better understanding of the impact on redundancy envoys is ever increasing.

The idiosyncrasy of redundancy envoys

Braithwaite et al (2005) found that most studies on the success of redundancies as a cost- saving strategy tend to challenge the validity of a reduction in personnel more than support restructuring. Gandolfi (2008) argues that there is significant empirical evidence to propose that the ‘consequences of downsizing are negative at best and disastrous at worst’, with Henkoff (1994), Cascio (1993, 2013), and Brockner et al (1985) agreeing that the research regarding redundancies has proved consistently that the anticipated benefits of redundancies have not been realised.

Leaders as redundancy envoys: the negative effects on business operation