Redundancy: A product design managers view…
A look at redundancy from the perspective of a senior Product Design Manager who’s been on the receiving and delivering end of the process in the UK.
At some point in most people’s careers, they will be made redundant. So far during my career, it’s happened five times. It’s never easy to deal with, even when, in my own case, I was partly responsible for one of my own redundancies.
It’s quite normal to experience a range of reactions to redundancy, from existential anxiety, rage against your employer, feelings of persecution, feelings of inadequacy, depression, and sometimes feelings of relief. All of these can be mixed together in an unhelpful and debilitating way that leaves you feeling profoundly unhappy.
The aim of this post is to give some insight into how redundancies tend to come about from a managerial perspective and hopefully alleviate some of those negative feelings should you be unlucky enough to experience redundancy. At their core, almost all redundancies are not about you… they’re about numbers or directional shifts.
Why managers dislike redundancy processes…
Every manager will have had to make people redundant at some point; it’s an unavoidable part of the job. It’s never an easy process. As a manager, a lot of time and energy is spent understanding what the company needs from your team. Then more time and energy is spent pitching for the funding and staff numbers you need, sifting CVs, recruiting and assembling the team, and crafting your team culture and balance to ensure that it fits the needs of the company and can adapt to the inevitable changes that day-to-day business incurs.
What can be said with certainty is that any competent manager who’s spent time building a good team absolutely, 100%, dislikes breaking what they’ve spent time crafting and getting to work well. In most businesses, there are no spare roles, no people who don’t have the skills, and no room for team members that don’t fit the group culture, they won’t have been hired in the first place.
As a result, managers don’t look forward to the day that the CEO or CFO of the company announces either a change in ‘strategic direction’, or that the ‘financial headwinds’ or ‘business performance’ require a reshaping of the business.
These things happen though; business is subject to market changes which impact the viability of their products and services. A good example of this might be the obsolescence of DVDs when streaming movie services came online; suddenly no one wanted to buy the product, and DVD companies had to change tack or fold.
Similarly, as recently happened with Brexit, political changes can have a massive impact on the economy of a country, which then creates ‘financial headwinds,’ meaning financial conditions that are taking the business towards an inability to trade effectively. Sometimes there’s the perfect storm of economic and market changes that hit at the same time. Either way, businesses have to try and survive and adapt to these changes. It’s evolution.
CEOs do their best to evolve their businesses to cope with these changes, and the good ones try as far as possible to minimise the impact on staff within the business. Why minimise impact? Because if you destroy the morale of your staff, you effectively destroy their ability to operate effectively, and thus undermine your own business.
It’s for this reason that, as a rule, CEOs with any intelligence try to avoid rounds of redundancy or minimise their impact as much as possible.
How do they minimise impact?
There are several methods that companies use to try and avoid rounds of redundancies.
These usually start with recruitment freezes. The advantage of recruitment freezes is that it allows you to save money on the recruitment process and forces the business to make do with what it has in terms of human resources. It’s worth noting that recruitment processes are fantastically expensive in terms of person-time and thus salary, particularly as it tends to be managers and senior staff that have to undertake the recruitment process. Not to mention that if recruitment agencies are involved there are substantial fees involved as well. The manager and their team consequently have to adapt as best they can to the increased workload and adjust expectations accordingly.
The next most common approach, which is often associated with a recruitment freeze though not exclusively, is staff reduction through what’s called ‘natural wastage’. That is, when a staff member leaves, they’re not replaced, thereby saving the salary and all the associated costs (pensions, contributions, insurances, etc.). Depending on the seniority of the leaver, this can lead to quite substantial savings.
Then comes voluntary redundancy. This is not always offered to staff as it is expensive to the business. Depending on the length of tenure of the volunteer, a business can be on the hook for substantial redundancy payments. However, it’s still preferable to redundancy rounds as voluntary redundancy tends to be perceived more positively than enforced redundancy, and can offer opportunities for the right candidates to review where they are in their career, retrain, or just take an extended break.
Within most businesses, these are not ideal, but they are preferred methods of cutting staffing rather than going into rounds of redundancies. While they inherently put more pressure on teams to perform under constrained circumstances, they’re better than having to let people go, and from a management point of view, it’s much more straightforward to keep up morale.
Redundancy rounds
Then we get to the crunch: redundancies.
When companies have to adjust to market or financial conditions or have to pivot their strategic direction quickly, hiring freezes and natural wastage processes are too slow to be viable. At this point, triggering redundancy rounds becomes the only viable solution.
Businesses don’t like doing this… it creates significant issues within the business in terms of motivation and morale. The last thing you need when your business is in a difficult situation is to have staff who are scared, anxious, worried, and for whom redundancy is their primary thought, not their day job.
Redundancies in the UK (and most EU countries) are managed these days in a structured way due to well established legal processes, and while experienced in the process, I’m not going to dwell on it as there are better sources on the internet. Suffice to say that the process doesn’t allow for a manager to just arbitrarily pick someone to make redundant.
It’s not about you…
It’s not a personal process, though I know from my own experience it really feels like it at the time. Even when I made myself redundant from a scale-up, I still felt all the same emotions that I have had when being made redundant by others.
Redundancy rounds are about scaling role numbers either to manage financial figures or to reshape business functions or departments to better address a new direction. The process these days is about as neutral as it can be. Numbers of roles to be cut and specific types of roles can be defined as needing to be cut. New profiles of roles that may need to be filled can be offered to existing staff who are at risk of redundancy to apply for in whatever numbers they are available. But whether you are made redundant is not about you personally. It’s certainly not a reflection of your worth or value as a human being, and that is something important to remember.
It’s true that sometimes the role that you’ve been filling, possibly for some time, is not what the business needs anymore, but that’s not about you either. You can retrain, evolve, take all the experience you have, and move on to better things.
It’s not that the company doesn’t value you. Sometimes it’s just unavoidable that a role has to be cut and you’re the one. People managers will always, at some point in their careers, have to make perfectly brilliant people redundant for one or other of the reasons above. Redundancies are always particularly difficult in small teams. But remember, we all have value, and that value is not defined by a company that employs us nor the perceived status of a job.
Redundancy is like a relationship that has come to an end. It can feel like the end of the world, but it is an opportunity to reflect on what we’ve been doing. In my experience, it opens up new opportunities that have made my career journey stronger and more enjoyable.
So if it happens to you or is happening now, seize the chance offered to review where you are and where you want to be; it is an amazing opportunity! I can promise you one thing based on my experience; that you’ll one day look back on the experience and it’ll either be the source of a funny story, or the moment your career path developed into something better…it was just a moment of vertigo in your journey…
Fun fact:
I joined a dot-com start-up, only to face the best (in hindsight) layoff of my career. On the Friday of my farewell party at my old job, they called to say the company had folded. “Don’t come in on Monday,” they said. How often do you get made redundant before you even start? Two weeks later, I landed a new gig that had me in New York one week out of every four… not a bad turnaround!
