Lost a job? It might be the start of a fresh new world

Retrenchment always has the greatest impact on the employee. However, being retrenched can provide the needed encouragement to launch a new career or even start business. FILE PHOTO 

In Summary

• Sometime last year, Deputy President William Ruto said the government would cut the size of the civil service in an effort to tame spiralling wage bill.
• While some jobs fall away in some areas, we hire in others. So, it is not a downsizing. It is a rightsizing in a sense. We are talking roles from back office to the sales and service front, noted Mr Awori.
• According to the online journal, restructuring can be used as an opportunity to address long-term problems, it provides a chance to give the remaining staff a reason to stay and gives prospective new hires a reason to join.

By JOSHUA MASINDE
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Nothing probably sparks fear among many employees as much as the news of an impending restructuring.

Arguably, one of the most common reasons why companies restructure is to downsize their staff due to job redundancies that may be resulting from change in technology, a tough operating environment due to stiff competition or when the economy is hit hard by recession.

As fate would have it, in the mix of restructuring are the employees, who often keep their fingers cross, hoping that their jobs will not be on the line as the company moves to redefine its strategy in the increasingly competitive market.

Many firms usually try to package the process in a less dreadful manner simply saying the company is restructuring in line with changing trends in the business environment. But, many employees have always construed this to mean job losses as the firm moves to trim costs. 


Take last year for instance, many companies, led by commercial banks, in the name of saving costs, took the restructuring route, hundreds of employees were affected.

Barclays Bank, Equity Bank, Kenya Commercial Bank, National Bank of Kenya and Kenya Airways were some of the Nairobi Securities Exchange listed companies that carried restructuring, a process that saw many of their staff ‘voluntarily’ retire, in the pretext of saving operational costs.

Sometime last year, Deputy President William Ruto said the government would cut the size of the civil service in an effort to tame spiralling wage bill.

There are indications that over 100,000 civil servants could face the sack in order for the government to save part of the Sh500 billion that is spend annually in paying salaries to civil servants. The amount is about 12 per cent of the country’s Gross Domestic Product. The plan is to cut it by half.

Plans to restructure parastatals by drastically lowering their number is also expected to result to retrenchment as was the case with implementation of the structural adjustment programmes in Kenya in the early 1990s.

In the private sector, many companies also said they would now leverage on technology for service delivery, with others, like the Kenya Airways citing a tough business environment as a reason to sent home some of its workers.

KCB for instance said it used about Sh1.2 billion, while Barclays used about Sh800 million, with National Bank of Kenya expending millions of shillings too in restructuring, meaning that employees who had ‘voluntarily’ opted to ‘retire’ received varying pay-outs.

In an earlier interview, Barclays Bank chief executive officer Jeremy Awori noted that when the lender undertook restructuring in March last year, about 180 employees were affected. 

“There are some people who said they had been around a lot and there are changes in the bank and my role has changed, so I rather go and do something else. So, we facilitated that to happen,” he said, adding: “The beauty with this is that it was a win-win for everybody. Nobody was forced to go home.”

While some jobs fall away in some areas, we hire in others. So, it is not a downsizing. It is a rightsizing in a sense. We are talking roles from back office to the sales and service front, noted Mr Awori.

Are employees prepared?

In the banking and other industries that continuously rely on technology for service delivery, the relevance of some employees keeps declining as investments in technology take centre stage.

For instance, in May last year, Standard Chartered Bank opened a fully digital branch to offer unmanned banking services at the Junction shopping Mall on Ngong’ Road, Nairobi. This was part of a strategy to cut personnel costs and raise efficiency in delivering services to customers.

The lender’s digital banking outlet now offers services through intelligent ATMs as well as via online and mobile banking platforms, enabling customers to transact on their own.

Restructuring in a company is usually a costly affair, but how are the affected employees prepared for such?

“When an economy is experiencing a slight decline or downturn, restructures and retrenchment will always gain greater attention,” says George Gichuhi of Hector Consultants, a personal finance advisory start-up.

According to audit firm, Pricewatercoopers (PwC), organisations need to ask themselves a number of questions in the face of an impending restructuring. Some of these include: Is your restructuring adding value to your company?

What are the business drivers behind your restructuring requirements? What should your redesigned organisation look like? Are you obtaining function efficiency and true value for money for your spend?

Do you know the answers to the ‘me’ questions that employees will be asking? Have you got effective communications plans in place? Are you engaging with employee representatives in an appropriate manner in each of your markets? How do you manage your employment brand in such challenging times? How do you retain key talent now and in the years to come? How do you continue the development of tomorrow’s people whilst restructuring?

“If layoffs are necessary, be sure that employees perceive the process of selecting excess positions as fair and make decisions in a consistent manner. Make special efforts to retain your best performers, and provide maximum advance notice to terminated employees,” says Iveybusinessjournal.com.

According to the online journal, restructuring can be used as an opportunity to address long-term problems, it provides a chance to give the remaining staff a reason to stay and gives prospective new hires a reason to join.

“Unless severe overstaffing is part of a long-term problem, consider alternatives to layoffs first, and ensure that management at all levels shares the pain and participates in any sacrifices employees are asked to bear,” the journal notes in part.

Although it is not a nice feeling losing one’s job, the affected party may gain by not engaging in self-pity.

“While retrenching or restructuring someone is a tough management decision, it will always have the greatest impact on the employee. Being retrenched can provide the encouragement you need to make a break — even pursue a new career path that you may not have considered previously,” Mr Gichuhi says.