Leadership
Reviewing your staff structure
Facing the prospect of staff restructuring
If you need to make staff redundant

Leadership

NEXT STEPS

Your staff are one of your biggest assets in recovering from a crisis. People are usually very understanding and generous with their time to help get the business back on track. However, it is important to recognise that their energy is likely to burn out within a couple of weeks, so if you place extra responsibilities on staff, do not expect this level of over and above effort to continue indefinitely.

Involve your staff as much as you can in the process of restoring your business to normal. Regular communication can help people feel part of the team and to understand the reasons behind any tough decisions that are made. However, decisions on staff cut-backs and reduced hours will have to be made by you. With your staff as your biggest cost, this can be an important call.

“Our staff were wonderfully supportive after the bushfires. We were very upfront with them, holding regular meetings to update everyone on what was happening in the business. They could see our operating conditions were very different and were more careful about being economical and keeping costs down.”
Samantha Magill, Former Owner, Big 4 Parkgate Resort, Halls Gap

Here are some tips on things to do:

• Make a thorough appraisal of the short, medium and long term situation before making decisions about the future of your staff
• Stay calm – the staff will be anxious enough
• Listen carefully to staff advice and concerns
• Keep everyone informed – although you may be stressed about the impacts on your personal future and assets, continue to communicate with staff
• Maintain normal procedures as much as possible
• Take charge of each emerging situation – show leadership.

Melbourne Aquarium
When an outbreak of Legionnaire’s Disease was tracked to the cooling towers of the newly opened Melbourne Aquarium in 2000, the repercussions for visitors, the business and staff were enormous. According to Tom Smith, former Manager of Melbourne Aquarium, in the midst of the public outcry the pressure on staff working at the Aquarium was enormous. In the eyes of some members of the public, the staff were personally responsible for making people ill. “We developed a strong focus on involving and supporting staff through this time, which they really needed.” said Tom. “We had regular meetings with staff to explain all the issues relating to the situation. It was important to reassure them and to give them real knowledge. They were always briefed prior to the media. I would also walk around to each staff member twice a day to have a chat to them, to find out how they were coping personally.” “One thing we didn’t do so well was look after the management team. Our focus was to make sure our staff kept it together but we didn’t support ourselves in the same way. Many of us were working 14 to 16 hour days. Looking back, we could have improved the rostering to provide more staff with time off. Many people would have benefited from counselling or professional debriefing.”

Reviewing your staff structure

NEXT STEPS

How important are your staff?

Many small tourism businesses do not employ staff other than the business owners themselves. However, for growing businesses the need to employ extra staff, or engage contractors, becomes inevitable. In a tourism business, key staff are probably your greatest business asset.

If the business’ success is closely tied to the skills or reputation of yourself or your managers, then this may give you some flexibility when deciding whether to retain staff in the event of an emergency.

In deciding to restructure the staff team, your first concern should be whether the success of the business can be sustained.

Questions to ask include:

• Should the existing mix of skills in your business be retained or broadened?
• Can any critical skills be outsourced to contractors, rather than retaining permanent staff?
• Will training be required if we ask remaining staff to take on broader responsibilities? Would this be external or on-job training?
• Should retained staff be:
• purely assistants
• ideas people
• customer focussed
• money earners for the business?

Facing the prospect of staff restructuring

Before taking the serious action of retrenching staff, look at all the options that may enable the business to retain staff, beyond a short or medium term crisis. These are a few to consider:

• Inviting employees to take any accrued leave entitlements while a crisis is ongoing. These entitlements would need to be paid even if the staff member is retrenched, so business cash flow would be unchanged. However, you would need to be confident that the emergency impact would only be short-term, and that the person’s job would be secure in the longer term. Otherwise the employee would be deprived of any income while seeking new employment.
• Negotiating for staff members to take leave without pay, or full-time workers to work part-time. Again, you would need to be confident that the emergency impact would only be short term, and you could restore the normal working arrangements for the person soon after.
• Considering the merits of changing staff employment arrangements to contracting arrangements so that your staff has the potential to earn other income. This would reduce the ongoing commitment of the business to regular wages. However, there must be genuine prospects and intent for contracted staff to attain other work; a simple arrangement whereby a business abrogates its responsibilities as an employee by engaging dedicated contractors is not legal.
• Negotiating with other local businesses to employ your staff on a temporary basis. This can have legal and practical complications if the location of the work is less accessible to the staff member, or if the job requirements are substantially different from those at your business.

If you need to make staff redundant

If you’ve concluded that there’s no way to retain all of your staff as a result of a crisis, and the impact of the crisis is likely to have a long-term threat on the viability of your business, the following are some points to consider in relation to redundancies.

Check the Industrial Award, the Employment Agreement, or the business’ own Terms and Conditions of Employment, to be sure of your legal obligations in negotiating with staff or making any changes to their employment arrangements. Advice from an employer organisation (such as the Victorian Employers’ Chamber of Commerce and Industry) may be helpful.

Of particular importance will be to note what may be required in terms of:

• Any specific redundancy payments
• Potential for claims of unfair dismissal. There have been many cases where it has been assessed that an employer has sought to disguise wrongful termination as redundancy.
• Accrued leave and benefits.
• Ability to make it clear that retrenchment is necessary due to a downturn in business, rather than the unsatisfactory performance of the employee.
• The way in which the retrenchment is communicated to the employee.
• Provision of adequate notice and support to the outgoing employee, such as references.

• Discuss any changes with affected employees before putting changes in place.
• If you decide to go ahead with a restructure, make the process as easy as possible on staff by explaining why the restructure is happening, allowing time for one-on-one feedback, and providing a process that supports staff in retaining their dignity and self-esteem.
• Make sure the restructure does not leave your remaining staff disillusioned or uncertain about their own future. Keep staff informed about why you’ve made the decisions you have.