Beyond Survival: Navigating Restructures and Growth in 2025

In the second half of 2024 we often heard “survive till 2025” in the business world.  With 2025 in full swing, how are things looking in your business? 

Despite ongoing political and economic uncertainty, the business community recognises the need to move forward.  For some, this means pursuing goals and taking risks; for others, it requires making tough decisions, from strategic shifts to structural changes. 

Restructures and redundancies are tough

Especially for  smaller businesses where the decision makers often have personal working relationships with those facing restructures.  In these smaller enterprises, most owners have put in their heart and soul, and often their financial security, on the line for the business. 

These decisions are rarely made light heartedly.

So, what to do for the business in this position? 

1.        Assess the situation: Look at your strategy, goals and financial situation – do these align with your current staffing? 

2.        Speak to your staff: Have you been having regular conversations about business performance?  Do they know that things are tough? (You don’t need to fully open your books, but a general overview is helpful.) Do they have any ideas? In an ideal world staff reviews should be frequent (at least quarterly) and any restructure shouldn’t come as a shock.

3.        Get advice: Check with professionals whether there are any other solutions financially, strategically or structurally.

You’ve decided to restructure – what next?

1.        Get advice on your obligations:

There are procedural requirements to follow in a restructure process.  This applies not only if you are making roles redundant, but also if you are making significant changes to a role or employment terms (e.g. hours). The consequences an incorrect procedure can be significant.  Business can find themselves in front of the Employment Relations Authority facing personal grievance remedies (e.g. lost wages and compensation for hurt and humiliation) and penalties.  If you are restructuring, it can be assumed you can ill afford these.

2.        Get advice on communicating change:

Restructures by nature are emotive.  However, a well-managed restructure can treat staff with dignity and respect.  This avoids burning bridges with staff that you may wish to welcome back in future when times have improved.  At EASI NZ we’ve seen both sides – employees facing a restructure looking for advice and whilst the restructure is technically compliant, poor communication and management create resentment.  On the flipside, we’ve supported restructures that are well communicated, empathetically handled and despite the disappointment in being made redundant departing staff have thanked the company for the manner in which the restructure was handled and were understanding of the situation.  In the latter situation, when times improve these employees might conceivably welcome an offer to return to the business. With the first situation, those bridges were well and truly burned and relationships with remaining staff were damaged.

3.        Make sure you are looking after yourself!

Restructures aren’t just stressful for staff, they can also be a huge source of stress for those running them.  Before you begin, have a think about what your support networks are, and what you can do to ensure that you are looking after your own wellbeing as well as your employee’s.

So now that it’s 2025, what’s your next move?  The team at EASI NZ can help you navigate the best way forward by:

·      Helping to analyse how your staffing structure fits with your future strategy.

·      Identifying any skills gaps and how to fill them either through learning and development or recruitment.

·      Supporting you to run a dignified and respectful (but of course compliant!) restructure process.