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Almost one-half of Australian employees doubt their leaders’ ability to cope with the looming recession, and even fewer believe their bosses implement change effectively according to a new survey.

However, the Right Management ‘Restructuring for Growth’ survey of more than 28,000 employees across 15 countries found Australian senior managers are doing better than their global counterparts in managing the economic crisis — even though there is significant room for improvement.

Globally, 54% of employees doubt their senior management team’s ability to respond appropriately to changing external conditions, compared to 49% of employees in Australia and New Zealand.

Can’t implement change

Just 42% of overseas employees believe senior leaders implement change effectively, compared to 45% here, and 50% feel that management is keeping them informed of what’s happening, compared to 54% locally.

The research demonstrates a strong link between effective change management and continuing engagement and productivity. Participants who said change was handled effectively were ten times more likely to be engaged than those who didn’t.

In companies where change is not managed well, 94% of employees are not engaged and 51% believe productivity is suffering. However, in companies with effective change management, only 40% of employees are not engaged and just 3% feel there are issues with productivity.

Right Management’s general manager of Australia & New Zealand, Bridget Beattie, said the results provide some clear lessons for leaders facing a restructure.

Hard to avoid slide in productivity

‘Restructuring is a complex issue with make or break implications for a company,’ she said.

‘It’s relatively easy to reduce head count but much harder to avoid a consequent slide in productivity, customer loyalty and profits.’

‘Ultimately, a successful restructure or downsizing depends on the engagement and motivation of those who remain in the team.’

Beattie believes that the link between engagement and profitability is now widely accepted by corporate Australia, but in the current climate it’s at risk of falling off the agenda.

‘Employee engagement has been a focus for many companies in recent years as they struggled to attract and retain talent,’ she said.

‘However, as tough times move the focus from retention to restructuring, it’s crucial that these lessons are not forgotten for the sake of short-term cost reduction.’

Financial implications

‘Often, the financial implications of a poorly run change program may not be realised until 6–18 months down the track,’ she said.

Right Management advocates a phased process for restructuring, in order to avoid a slide in profits or performance.

‘The planning stage is for developing a strategy that seeks to identify and then retain the skills and capability the company needs,’ Beattie said.

‘The implementation phase must be based on clear timelines and accountabilities, and provide support for line managers who are leading their teams through the change. A clear process for providing career transition support is also crucial.’

Engaging employees after restructure

Beattie said the next step is to focus on engaging employees after the restructure.

‘The leadership team needs to be active and visible to employees, and put in place initiatives to re-engage those who remain,’ she said.

‘People and performance management systems must also be used to monitor the effect of the change, so that management can keep a close eye on progress and respond when it’s needed.’

‘Beyond the effect on company reputation and each employee’s wellbeing, a well-managed change program will deliver greater profitability in the long term.’


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