Norway: Restructuring your team? Here's how

With inflation on the rise and budgets being squeezed, it is no secret that companies are having to review the efficiency of the organisation and make savvy decisions in order to survive and thrive.  Managing resources such as employees becomes a delicate balance in such situations. Companies should take great care in exploring the following options in order to achieve their short term as well as long term goals:

Retraining (upskilling) employees

This is often an overlooked option. The cost of replacing staff is astronomical and retaining existing talent to fill any gaps in the organization would increase employee engagement, boost morale, develop deeper commitment and increase productivity. In short, it sends the right message to the employees and maintains the company’s reputation. 

Offering pay cuts

According to a recent study, 74% of employees say that they would take a pay cut for a new job with a thriving culture that is ideal for growth. This suggests that, as long as your company keeps morale high and has a realistic long term growth plan, employees may be willing to stay on at a lower salary. 

Reduction in workforce

This decision should never be taken lightly. However, it is sometimes the inevitable outcome. In such cases, employers should be aware of the following statutory restrictions / formalities that must be be observed in order to avoid financial and reputational penalties: 

  • If the redundancies amount to 10 or more employees within a period of 30 days, the employer is legally obligated to consult the employees’ elected representatives as early as possible. Even if the downsizing leads to less than 10 redundancies, it is best practice (and common practice) that the employer consults with the elected representatives in any event. Companies that regularly employ at least 50 employees are also legally required to provide information concerning issues of importance relating to employees’ working conditions and discuss such issues with the employees’ elected representatives. 

  • The selection of whom to dismiss and the criteria that the employer uses to make this decision must be objectively justified.

  • In order to determine which employees to dismiss in a downsizing process, an employer must establish a selection pool and a number of selection criteria. The selection criteria are measurable factors that are used to compare one or more employees within the selection pool to determine who will remain in the organization. The selection pool forms the group of employees that should be compared using these selection criteria.

  • The employer must, before making a decision regarding dismissal with notice, discuss the matter with the employee. The “15-1 meeting” is an individual consultation with each employee held prior to making a final decision in regards to a dismissal.

  • If the employer decides to dismiss the employee, the employee is entitled to be informed in a notice of dismissal. Employers should be aware that there are strict formal requirements for the notice.

  • The employees have a legal right to negotiations provided such written requests to negotiations are submitted to the employer within two weeks of receiving the dismissal notice. 

To find out more about how to deal with your reduction in workforce, speak to one of our friendly experts!