Rightsizing your business?

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June 12, 2020

Rightsizing your business?

Article written by: Dale Holloway

The famous Churchill saying, “never let a good crisis go to waste” should be the rallying cry of all leaders and business owners during this period of COVID-19 lockdown. Initial fears, anxiety and dare we say panic at the outset have given way to new thinking, new visioning and forced all leaders to operate out of there comfort zones. The old normal is fast becoming “old” and looking at new ways of working, engaging and operating has quickly gained momentum thanks to platforms like Zoom, Skype, MS Teams and others.

This shift, as challenging as it has been, however also opens opportunities to critically review organisational and team structures, manpower efficiencies, productivity levels, fixed asset costs and floor space requirements amongst others. The impact of COVID-19 is far-reaching, and the reality exists that companies in distress will need to explore options that will force them to right-size or downscale their teams or seek sale or merger and acquisition opportunities.

When an employer faces such crucial decisions, they must apply their minds to the impact on staff and the critical need to consult with all stakeholders and affected parties as guided by Section 189/197 of the Labour Relations Act. However, before proceeding down that path attention must be given to developing a sound business case that aligns to business strategy and company goals whilst not losing sight of the culture and values that underpin a company’s purpose.

Crowe DNA has skilled experts who can help employers navigate the tricky path that needs to be followed when considering the need to explore organisational restructuring to ensure that procedural and substantive fairness is always upheld. Our experts will ensure that companies mitigate their risks and the inherent cost impact when identifying areas in their business that can become more efficient, productive and streamlined.

Typical scenarios that employers can consider when moving to a new and transformed operating model that affect staffing manpower can be:

  • Re-organising and combining work duties
  • Changing job functions and performance contracts
  • Adopting new work methods and technological platforms that render roles redundant
  • Outsourcing of non-core essential functions to external expert providers
  • Selling off/merging business divisions or entities to other market players
  • Selling the business in full to new owners or pursuing a management/staff buy out
  • Closing the business and retrenching all employees

Any decision taken to initiate the above options needs to be considered very carefully, in light of the impact on your staff and other stakeholders, bearing in mind that in most cases such procedures will require consultation with the union and/or collective bargaining councils. Taking the wrong steps will place your business at significant risk of incurring unnecessary costs and can cause serious reputational damage.

 

Crowe DNA has the expertise to advise, consult and facilitate the management of any process mentioned above. Call us on 087 057 2613 or email us at infodna@crowe.za.com or go to our website www.crowedna.co.za and we’ll gladly assist.

Crowe DNA is an approved essential services provider and certified to support clients at their premises. 

 

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your adviser for specific and detailed advice.  Errors and omissions excepted (E&OE).