Downsizing with dignity

It's easy to botch the process and demoralise staff and supporters. So how do you make cuts well, asks John Plummer

(Image: MHJ/Getty Images)
(Image: MHJ/Getty Images)

The disability organisation Scope has perhaps undergone a bigger transformation than any other major UK charity in the past decade. During an 18-month process, Scope sold its 52 regulated and day services to focus on equality for disabled people, which reduced its workforce from 2,136 to 770.

When its five-year strategy was launched in April 2017, the charity had put measures in place to respond to the many concerns voiced by staff.

"Communication was absolutely critical," says Tracy Griffin, executive director of marketing, fundraising and communications. "Our standpoint was to be as open as we legally could be with all stakeholders."

Besides communicating with employees through the intranet, emails, phone calls, meetings and letters, Scope set up a transformation group, which met weekly to discuss communication and decide who should deal with each issue.
A communications team member was seconded to deal solely with the transformation and board members with HR experience were consulted. Mark Atkinson, the chief executive at the time, ran live question-and-answer sessions.

"We had a team of people making sure everything was done through a fair process and articulated clearly to staff, beneficiaries and the press," says Griffin.

More than half the workforce transferred to the private care company Salutem Healthcare, which largely determined those roles that were retained.

But when due diligence dragged on six months longer than expected, Griffin says, it caused "real concerns" that enough staff might leave to destabilise the charity.

"The communications group put a lot of time into explaining why it was taking so long and giving reassurance," says Griffin.

Consequently, staff turnover increased by just 1.3 per cent in the year to 30 April 2018, when the transfer was completed.

Griffin urges charities that downsize to create transformation teams, call on pro-bono support and have clear frameworks of responsibility. Key staff in the process must take their holidays to avoid getting overwhelmed, she adds.

And charities should think of restructuring as a beginning rather than an end. "It’s a challenge to maintain the drive and resilience of staff afterwards when the energy is needed just as much," she says.

Not all charities have the luxury of being able to carefully plan how to downsize. Siobhan Endean, national officer for community, youth and not-for-profit sector at the union Unite, which has 50,000 members, says short-term voluntary sector funding often means charities have to make difficult decisions about staffing levels in relatively short timeframes.

Work together

She recommends that charities hold monthly meetings with union reps, keep them informed about their financial situation and, when trouble strikes, work together on alternative business plans that might include measures such as recruitment freezes and flexible or reduced hours before considering redundancies.

Charity staff often buy into their organisations’ aims and values and can get upset if they start holding sham consultations after they have decided to make redundancies. Many charities inform staff "way too late", says Endean. "Things are far more difficult when the first thing staff hear is that there will be a consultation on redundancies, because by then it’s difficult to engage after that," she says.

HR teams also need to consider legal issues, such as whether it’s a collective
redundancy situation involving more than 20 staff, consultation periods and equality impact assessments. Contacting the conciliation service Acas can also smooth the process, says Endean.

Gavin Edwards, national officer for the community sector at the union Unison, which has 83,000 voluntary sector members, says: "My advice to any organisation looking at this would be to engage with a recognised trade union at the earliest opportunity. Our priority is to minimise job losses and ensure that the voices of staff are heard loud and clear during any consultation process."

Richard Litchfield, chief executive of the management consultancy Eastside Primetimers, says charities should not allow restructuring to distract them from thinking ahead, however fraught things are.

"Make sure it’s as painless as possible and redesign for the future," says Litchfield. "There are lots of difficulties with restructuring, but having a clear process isn’t one – that’s good management."

Reach Volunteering, which matches volunteers with charities, has more staff now than it did in 2012 when financial trouble forced it to "cut ruthlessly", says chief executive Janet Thorne. It also fundamentally changed by transferring its services online and now has greater impact.

"Sometimes the best way out is to have a big, bold vision," says Thorne. "We could have taken the cautious route and tried to eke things out, but I don’t think we would be here now if we did."

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