How Restructuring Impacts Employees

Organizational restructuring is the method of changing and transforming a company’s structure and processes to achieve its goals and objectives. The organizational restructuring comprises changing the workflow, communication reporting, department and units, roles and job titles, work shifts, and hierarchy. Today, we’ll discuss how restructuring impacts employees and; the top ways how restructuring affects employees.

Purpose and Objective of Organizational Restructuring

• Finding and exploiting new business opportunities
• Improving operational efficiency
• Developing new capabilities and new capacities
• Decreasing overhead cost
• Amplifying the organizational agility

How Restructuring Impacts Employees

Let’s discuss how restructuring impacts employees; some of the main ways restructuring affects employees are as follows;

Layoffs

Layoffs have a great long lasting effect on employees and team members and it is a very common outcome of organizational restructuring. Layoff is the method of dismissing and terminating employees permanently because of organizational restructuring and negative economic circumstances. Employees would lose their jobs and roles that they used to work for as a result of the company’s layoff strategy. They need to find new employment opportunities, new jobs, and new roles to make their living.

Cost Cutting

As the name implies, it is the cost-saving strategic approach that companies implement during the restructuring process. It comprises shutting down non-performing departments, freezing employee benefits and salaries, and limiting staff. The cost-saving measure would greatly affect employees both emotionally and financially. It decreases their morale and confidence level due to the negative and uncertain future.

When you cut off employee salaries and freeze their benefits, then it jeopardizes their morale and confidence level. Decreasing salary would make the employee feel undervalued and not engaged in their work.

Changing Teams

Organizational restructuring disrupts the dynamics of the team. It reorganizes and disassembles the teams in the organization and relocates their offices. However, the overall change is very difficult for employees, and they aren’t working in their familiar circumstances, processes, and colleagues. It is because they become used to them over time.

New Roles and Responsibilities

Organizational restructuring often creates new roles for employees. It creates mixed feelings of anxiety and excitement among employees and team members. However, they show a great interest in exploring and working on new roles and accepting responsibilities. Employees would feel underqualified or overqualified for the new role. It could be true if the organizational restructuring changes the job titles and roles. For instance, an employee was performing the helping role, and now he has to play the leading complicated role.

Negative Emotions

Employees feel various types of emotions during the organizational restructuring process like sadness, frustration, anger, and resentment. It is common for employees to feel betrayed and helpless while dealing with layoffs and taking the new roles and responsibilities. However, anxiety and stress are very common among employees during the organizational restructuring process. Even if the changes aren’t directly impacting them, they feel uneasy and stressed due to the restructuring.

Employees and team members would feel undervalued due to the restructuring; especially if the company is cutting their salaries and freezing their benefits. It causes them limited engagement with their roles and responsibilities.

Lower Productivity and Morale

The organizational restructuring process negatively affects the motivation level of employees. It makes them not engage with their work, and it reduces their productivity. It could be true when it comes to large-scale organizational restructuring efforts of massive employee layoffs and cutting their cost and salaries. Limited motivation levels, decrease their commitment to work and reduce their performance and productivity.

Knowledge, Skill, and Expertise

It is difficult for employees and team members to improve their knowledge, skills, and expertise relevant to the new organizational structure. They find it difficult and challenging to analyze the requirements and demands of new knowledge, skills, and expertise. However, the HRM department plays a key role in recognizing the key weak elements and conducting training programs for them.

How to Deal with Negative Effects of Organizational Restructuring

Let’s discuss the main tips on how to deal with the negative effects of organizational restructuring; they’re as follows;

Open Communication

Managers and companies should openly communicate with them about the organizational restructuring process. It comprises of informing them how the change program would impact their job and roles; how long the restructuring process would last, and the new roles and responsibilities of their job.

Regular Feedback

Managers and leaders should regularly provide feedback to the employees and team members. It makes sure that employees have the knowledge and expertise to adjust to the new roles. However, it allows them to develop an open dialogue between managers and the staff and discuss how to make the changes successful.

Training Programs

Companies should conduct training programs for employees to adjust to the environmental setting. If the company is investing in employee development, it amplifies the knowledge, skill, and expertise required for their new role.

Conclusion: How Restructuring Affects Employees |How Organizational Restructuring Affects Employees

After an in-depth study of how restructuring impacts employees; we have realized that organizational structuring is difficult and challenging for employees. If you are learning about how organizational restructuring affects employees; then you should keep in mind the abovementioned ways and tips on how to deal with them.