Today's businesses face many challenges. Challenges that make it crucial to adapt and evolve. Especially to deal with lingering issues, such as those associated with the pandemic, the supply chain crisis, a slow economy, and others.
Organizational restructuring, or "corporate restructuring," might conjure thoughts of financial chaos and mass layoffs. However, it is a long-standing strategic tool used to manage internal and external challenges with great success.
The resulting corporate transformation paves the way for improved culture, enhanced employee engagement, and the achievement of overarching business goals.
In this blog post, we'll explore the positive aspects of organizational restructuring and why it's important for HR to lead the charge to ensure success.
Organizational restructuring is a change in a company's basic business model, structure, operations, or processes.
It often involves reorganizing employee structures and team dynamics, shifting and improving its culture and engagement, repositioning itself in the marketplace, and updating its goals and strategies.
Let's look at a few common strategies for organizational restructuring.
Downsizing is possibly the most well-known and feared action involved with a company's reorganization. It focuses on reducing the size of the workforce through hiring freezes, layoffs, attrition, buyouts, and early retirement.
Hierarchical restructuring typically changes reporting relationships. It may focus on flattening the hierarchy, creating new managerial roles, or redefining the chain of command.
Businesses look to HR departments and HR consulting partners to objectively help guide and design the new hierarchical structure. These professionals examine positions to identify the need for each role and the relationships between them.
With the rise in hybrid and remote or virtual workplace models, many organizations could benefit from restructuring to accommodate a more distributed workforce.
This type of reorganization might focus on the following:
Today's companies need to launch restructuring efforts for one or several reasons in today's complex business environment. Remaining static in the face of multifaceted changes can prove catastrophic.
Corporate restructuring asks business leaders to take a closer look at the following:
By examining these factors and making the necessary changes through restructuring, businesses can take steps to enjoy greater success.
Fostering a positive company culture is an advantage today's business leaders must harness. By creating and fostering a positive workplace culture, employees feel empowered, supported, and heard, which helps them align with and support the company's vision and overarching goals.
Here are some highlighted workplace culture benefits you can expect with a well-designed restructuring plan:
It's important to help ensure that employees don't feel alienated during an organizational restructuring process. Enhance employee engagement with a few of the following strategies:
Business leaders embark on organizational restructuring projects for more reasons than cost-savings. It is frequently a measure intended to more tightly align the organization with its strategic goals.
A company-wide reorganization helps businesses do the following:
Organizational restructuring often creates an atmosphere of uncertainty and fear among employees, stakeholders, and customers. It's important to understand and address challenges and resistance that may arise.
Here are a few challenges and how you might address them:
Reorganization typically causes uncertainty, fear, and anxiety about job security, responsibilities, and roles. Lack of information can lead to resistance to change and decreased morale.
The best way to manage the fear is to remain transparent throughout the restructuring process.
It's natural for humans to resist change that disrupts their regular routines and comfort zone. Employers and HR teams can manage resistance by ensuring that employees feel involved in the decision-making process.
Ask team members to share their feelings and ask questions about how the organizational restructuring will affect their roles. Emphasize how the restructuring aligns with the organization's long-term goals and the company culture.
Taking a proactive approach to any issues that may arise during restructuring is crucial for a smooth transition and overall successful outcomes.
The CPS HR Consulting team understands the benefits, challenges, and solutions involved, and we are here to help. Contact us to learn more about our services and how we can help.
CPS HR Consulting is a self-supporting public agency providing a full range of integrated HR solutions to government and nonprofit clients across the country. Our strategic approach to increasing the effectiveness of human resources results in improved organizational performance for our clients. We have a deep expertise and unmatched perspective in guiding our clients in the areas of organizational strategy, recruitment and selection, classification and compensation, and training and development.