Restructuring Your Team in the UK? Here's How

Published:

Feb 13, 2024

With inflation higher especially in recent years, and budgets being squeezed, it is no secret that companies have to review the organisation's efficiency and make savvy decisions to survive and thrive. Managing resources such as employees becomes a delicate balance in such situations. Companies should therefore take great care in exploring the following options to achieve their short-term as well as long-term goals. Consequently, restructuring a team in the UK involves several vital steps for you to consider to ensure the process is effective, fair, and legally compliant.

Benefits of an Effective Restructure

A restructure can bring with it many benefits, with some of the top ones consisting of:

✅ Streamlining your processes and removing out-of-date roles with redundancies can significantly improve operational efficiency.

✅ Restructuring often leads to cost savings through more efficient resources being reallocated.

✅ It allows your organisation to realign its workforce and resources with its current strategic objectives.

✅ By restructuring, you can adapt quickly to market changes and stay competitive.

✅ It allows you to reassess employee roles and responsibilities, ensuring that everyone is in a position that best utilises their skills and strengths.

Table of Contents

  1. Define Objectives and Scope

  2. Plan the Restructuring

  3. Timeline

  4. Restructuring resources

  5. Legal Considerations for a Restructure

  6. Employee Consultation

  7. Inform and Consult Trade Unions & Relevant Trade Bodies

  8. Fair Selection Criteria

  9. Notice Periods

  10. Redundancy Pay

  11. Support for Redundant Employees

  12. Training and Support

  13. Cultural Impact

  14. Health and Well-being

  15. How to Restructure a UK Team Final Thoughts

Define Objectives and Scope

When it comes to restructuring, identifying your goals is a fundamental step in restructuring a team. This goal-setting is due to setting the foundation for all subsequent decisions and actions that need to be taken.

Consequently, clearly defined goals provide you with a direction for the change - ensuring that every aspect of the restructuring is aligned with the organisation's overarching objectives, company or corporation.

What are some goals to consider?

Whether the aim is to enhance efficiency, adapt to market shifts, manage costs, or innovate, having explicit goals allows for developing a targeted strategy.

Goals Facilitate Communication with Stakeholders

Goals also allow you to facilitate communication with the stakeholders, both directly and indirectly, affected significantly by:

1) Offering them a clear rationale for the changes

2) Aids in measuring the success of the restructure

3) Ensures that resources are optimally allocated to support the desired outcomes

Therefore, setting clear goals is crucial for creating a focused, coherent, and effective restructuring plan.

Restructuring Goal Scope?

With the Goal Scope for a restructuring, this part determines which parts of the organisation are affected by the restructuring.

Consequently, the goals should be well-scoped. Scoping goals, for instance, are fundamental to any team restructuring, as they provide clarity and direction for the entire process.

By precisely defining what the restructuring aims to achieve, you and your organisation can tailor your strategies effectively. This scope, for instance, could be based on whether it is to improve:

1) Enhancing efficiency

2) Reducing costs

3) Responding to market shifts

4) Improve service delivery

As a result, a clear goal scope can help you align the restructuring efforts with the broader objectives of your business - ensuring that every change made contributes meaningfully to the overarching vision.

Plan the Restructuring

When developing a strategy for team restructuring in the UK, the focus should be on aligning the organisational structure with its strategic objectives. 

This plan should involve evaluating your current roles, responsibilities, and processes to identify areas for clear improvement that need some realignment.

Key elements to your plan

Key elements to a restructuring plan can include, for instance, assessing the skills and capabilities within the team to ensure they match future operational needs and where the business is heading, considering the impact of technology and market trends on business efficiency, and identifying potential gaps or even if redundancies in roles may be required.

Outline a Clear Roadmap

This plan and strategy for your restructuring side should outline a clear roadmap for transitioning from the current structure to the desired one - taking into account the time and resources required, as well as potential risks and mitigation strategies - all at the same time.

Consequently, it is also essential to integrate flexibility into the plan to accommodate unforeseen changes and ensure that the restructuring supports your long-term business goals. All while remaining compliant with UK employment laws and employment laws in any country where your employees reside, if applicable.

Timeline

Regarding the timeline, you need to establish a clear timeline for a restructuring to be implemented. During this stage, it is crucial to balance thoroughness with efficiency.

What should the timeline consist of?

As a result, the timeline should start with an initial analysis phase - where objectives and impacts are clearly identified.

Detailed planning stage

This is usually followed by a detailed planning stage - outlining strategies and resources.

Legal considerations

Next, legal considerations are brought in - particularly compliance with UK employment laws for a UK-based company.

These should be integrated into these early stages.

Employee Consultation

The following phase involves employee consultation once the restructuring is planned and legal considerations are included. This stage ensures transparency and adherence to legal requirements for staff communication during the process - especially if redundancies are anticipated.

Implementation

Implementing the restructuring comes next, with a timeline that allows for gradual transitions, staff training, and role adjustments where required.

Review Period

Finally, a review period should be scheduled post-implementation to assess the restructuring's effectiveness and address any unforeseen consequences that may not have been fully addressed.

This entire process might span several months, depending on your organisation's size and restructuring complexity - with each phase clearly delineated to maintain focus and order.

Restructuring resources

In the context of team restructuring in the UK, you need to assess the resources required to conduct the restructure.

A restructuring takes up a lot of resources, especially regarding:

  1. Financial resources

  2. Human resources

  3. Technical resources

Financial resources

Financial resources are necessary for any potential severance packages, legal consultations, and training programs for remaining or new employees especially.

Human resources

Human resources play a crucial role, involving the HR department's expertise in managing the legal and interpersonal aspects of restructuring and allocating personnel to new or modified roles.

Technical Resources

Additionally, technical resources may be needed - mainly if the restructuring involves shifts in technology or operational processes. 

Consequently, effectively allocating and managing these resources is vital to ensure that your restructuring process is smooth, legally compliant, and minimally disruptive to your organisation's operations.

Legal Considerations for a Restructure

Regarding the legal consideration side, you must ensure that your company adheres to UK employment laws, especially.

This includes understanding redundancy laws, employee rights, and consultation requirements, to name a few areas.

Compliance helps you to avoid legal pitfalls

This compliance helps you to avoid legal pitfalls and ensure fair treatment of employees. For instance, in the UK, this includes adhering to the Employment Rights Act 1996, which governs redundancy procedures, and the Trade Union and Labour Relations (Consolidation) Act 1992 - which outlines requirements for collective consultation in cases of large-scale redundancies.

Provide clear, objective criteria

This aids you as an employer, as you must provide clear, objective criteria for redundancy to avoid discrimination claims and ensure that the selection processes are fair and transparent.

Give appropriate notice periods and redundancy pay

Additionally, you, or your employers, are required to give reasonable notice periods and redundancy pay, as dictated by the length of service and age of the employees.

Consult with employees or their representatives

It is also mandatory to consult with employees or their representatives about the restructuring plans, especially when redundancies are involved, allowing them to voice concerns and discuss alternatives.

Non-compliance with these legal requirements can lead to costly legal disputes and damage to your company's reputation.

Consult an Employment Solicitor or Lawyer

When undertaking a team restructuring in the UK, consulting with an employment solicitor is critical to ensure that all your actions comply with current employment laws.

Employment Solicitors, for example, can provide you with expert guidance on navigating complex legal requirements - such as redundancy rules, fair selection processes, and employee consultation obligations.

They can also help you identify potential legal risks and advise on best practices to minimise any liability.

Employee Consultation

Under UK law, this requires you, as an employer, to inform and consult your employees about significant workplace changes - mainly if redundancy might occur.

The "Inform and Consult" stage is a crucial legal and ethical obligation. 

For instance, as an employer, you must engage in meaningful dialogue with your employees about significant workplace changes - particularly when these changes may lead to redundancies.

This process involves you clearly communicating the reasons for the restructuring, the expected impact, and any proposed changes to roles or employment conditions.

Offering pay cuts

According to a recent study, 74% of employees say they would take a pay cut for a new job with a thriving culture ideal for growth. 

This suggests that employees may be willing to stay at a lower salary as long as your company keeps morale high and has a realistic long-term growth plan. Consequently, this should be something to consider as part of your process.

Voluntary Redundancies

Remember to also consider voluntary redundancies to avoid compulsory redundancies, and don’t forget that special consultation requirements apply where 20 or more staff are being terminated within 90 days.

Given a chance to voice their concerns

For instance, employees should be allowed to voice their concerns, ask questions, and provide feedback. 

If the restructuring affects many employees, the law may require consultation with trade unions or even elected employee representatives to provide fair representation.

Consultation must be conducted in good faith

This consultation must be conducted in good faith, genuinely intending to consider employee input before making final decisions. 

This aims to ensure transparency, mitigate uncertainties, and foster a sense of inclusion among your workforce during the transition.

Inform and Consult Trade Unions & Relevant Trade Bodies

If applicable, involve any trade unions, relevant trade bodies or employee representatives in the consultation process.

This is because trade unions offer crucial expertise in employment matters and help to ensure your employees' collective interests are represented during negotiations, allowing you to be legally compliant and foster better staff relationships post-restructure.

As a result, their insights contribute to informed decision-making and can mitigate adverse impacts from occurring down the line.

Additionally, consulting with unions fosters trust and transparency in your employer-employee relations, demonstrating that you are committed to respecting your employees' rights and fair practices.

Fair Selection Criteria

When it comes to redundancies, establishing a fair selection criteria is paramount and part of the legal complaint side, mainly when redundancies are involved. 

These selection criteria should be objective, non-discriminatory, and transparently communicated to all your employees.

Some of the most commonly used criteria can include 

  1. Skills and Qualifications

  2. Performance Records

  3. Attendance Records - excluding absences related to disability, maternity, or other legally protected reasons.

  4. Disciplinary Records

  5. Work Experience

  6. Competency Assessments

  7. Workload and Responsibility

  8. Adaptability

  9. Potential for Future Contribution

Criteria do not indirectly discriminate

As an employer, you should ensure these criteria do not indirectly discriminate against any protected rules under the UK Equality Act 2010

It's also essential to consistently apply these criteria across all your employees to maintain fairness and be back in line with your goals.

Documented in detail

The process should be detailed, providing a clear rationale for the decisions made. This documentation then safeguards you against potential legal challenges down the line.

As a result, you are advised to consult legal experts or HR professionals to ensure compliance with UK employment law.

Notice Periods

Adhering to legal requirements for notice periods is crucial.

Employers are legally bound to provide adequate notice to any affected employees when making redundancies.

Length of the Notice Period

The length of the notice period can vary based on the duration of the employee's service. 

For instance, at least one week's notice for employment between one month and two years, one week's notice for each year of employment - if they have been employed between two and twelve years, and a maximum of twelve weeks' notice for jobs of twelve years or more tends to be standard periods for you to factor in, in the UK.

Avoid potential legal issues

Compliance with these statutory notice periods is essential to avoid potential legal issues.

Align your specific contractual notice periods

Additionally, as an employer, you must often align your specific contractual notice periods with - or exceed - these minimum requirements, but you must offer more. 

As a result, it is essential for you to carefully plan and communicate these notice periods during the restructuring process to ensure a fair and transparent transition for all involved.

Redundancy Pay

In the UK, redundancy pay is a form of financial compensation provided to your employees who are dismissed due to their role becoming redundant.

Eligibility & Amount

The eligibility for redundancy pay is generally based on continuous employment for at least two years.

Furthermore, the amount of redundancy pay is determined by several factors. These can tend to include:

1) The employee's age

2) Length of service

3) Weekly pay.

Age-based Severance Pay

Employees aged 41 and older typically receive one and a half week's pay for each full year they were 41 or older, one week's pay for each full year they were 22 to 40, and half a week's pay for each full year they were under 22, with the length of service capped at 20 years for instance.

Statutory maximum limit

The weekly pay is also subject to a statutory maximum limit, which the UK government updates periodically.

You can also offer more generous terms, but not less than the statutory minimum.

As a result, your business needs to be aware of and adhere to these legal requirements when conducting redundancies.

Support for Redundant Employees

Providing support for employees made redundant during a restructuring process is a crucial aspect of managing transitions compassionately and responsibly. 

This support can take various forms, such as offering outplacement services that assist employees in finding new job opportunities, providing career counselling or CV-writing workshops, and ensuring access to financial advice - especially concerning redundancy pay and managing finances during unemployment.

The impact of restructuring can have a substantial negative impact

Remember, a restructuring can have a huge negative impact on your company's social presence, which in turn can lead to a downturn in productivity from the remaining team members.

Emotional support

Additionally, it's beneficial to provide emotional support through counselling services, as redundancy can be a stressful and challenging experience for those affected and staff not concerned about seeing their friends and colleagues go through the process.

Offering support mechanisms

As a result, by offering these support mechanisms, you not only help your affected employees transition more smoothly into new roles or careers but also demonstrate a commitment to employee welfare for the staff that are not being directly affected - which can positively impact the morale and perception of your remaining workforce.

Training and Support

This is often an overlooked option. 

For instance, the cost of replacing staff can be astronomical, and retaining existing talent to fill any gaps in the organisation would increase your employee engagement while boosting morale, developing a more profound commitment to the company and increasing your employee's productivity.

In short, offering and including training and role support to your remaining employees sends the right message to them while maintaining your company’s reputation and skillset after the process has been completed.

Cultural Impact

Restructuring is both a positive and also a complicated process to go through.

As a result, you should consider how these changes will affect your company culture and take steps to preserve or improve it where you can.

Otherwise, you could see the damage of a restructure, both outward-facing and inward, be worse than its benefits.

Understanding how changes will affect the organisation's ethos

This involves, for instance, understanding how changes will affect the organisation's ethos, values, and the way team members interact and work together. 

For instance, if you have just done a big push internally about inclusiveness a couple of months before restructure, this could been seen as a contradictory measure, thus giving less faith and affecting the impact of these activities down the line due to the timing of this occurring.

Consequently, a major restructuring can significantly alter your company's established norms and dynamics in more unforeseen ways than you predict.

Potentially lead to uncertainty

This can lead to uncertainty, reduced morale, and resistance to change, making the restructuring harder to achieve the goals you initially set.

Actively manage and guide the cultural transition

Consequently, it is essential to actively manage and direct the cultural transition during this time, ensuring that the existing culture's core values and positive aspects are preserved or even strengthened. 

The restructuring may also be a positive for your internal culture. For instance, if one of the goals is to be more positive and better at bringing forward-thinking ideas forward, this should be highlighted.

How to achieve this

This can be achieved through effective communication, involving employees in the change process, and ensuring that new structures, roles, and processes align with and support the desired organisational culture you are trying to achieve.

The goal here is to create a well-oiled, adaptive, and positive environment that embraces the necessary changes and fosters a sense of unity and purpose among all team members.

Health and Well-being

It is essential to pay attention to all employees' mental health and well-being during this challenging time.

For instance, in the context of team restructuring, prioritising the health and well-being of your employees is crucial.

If you put yourself in your employee's shoes, this period often brings uncertainty and stress, which can significantly impact their mental and emotional well-being, which can drain productivity from team members affected and team members who are not. 

To combat this loss in productivity, you should proactively offer support resources, such as access to counselling services or mental health days. 

Maintaining open lines of communication is essential, allowing your employees to express concerns and receive reassurance.

Regular check-ins

Regular check-ins and the promotion of a supportive work culture can also help to mitigate anxiety by significant levels as well.

Provide clear information about changes

Providing clear information about changes and their implications can also heavily reduce uncertainty.

Recognising and addressing these aspects

Recognising and addressing these aspects of well-being helps support your employees during the transition and contributes to a more resilient and adaptable organisation post-restructuring.

Please also see the complimentary social impact section above regarding this.

How to Restructure a UK Team Final Thoughts

It's important to note that each organisation's needs and circumstances are unique, so this guide should be adapted accordingly, and it shouldn't be taken that this is suitable word by word for every company.

Additionally, it's crucial to stay updated with the latest UK employment laws and guidelines, as they can change over time.

Disclaimer:
Please note: Pocketlaw is not a substitute for an attorney or law firm. So, should you have any legal questions on the content of this page, please get in touch with a qualified legal professional.

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