Redundancy

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GUEST OBSERVATION
Redundancies are attractive to organisations in crisis. Although the payouts cost money upfront, they can reshape the remaining workforce to make it leaner and more fit for purpose.
On the other hand they can demoralise that workforce, and they are far from good for the rest of the economy.
One alternative, available to the employers of as many as 6.6 million Australians for the next six months, is <a href="https://theconversation.com/that-estimate-of-6-6-million-australians-on-jobkeeper-it-tells-us-how-it-can-be-improved-137237" target="_blank">JobKeeper</a>.
Another is being tried with apparent success by <a href="https://www.domain.com.au/group/" target="_blank">Domain Group</a>, the real estate listings and journalism firm majority owned by Nine Entertainment Holdings, which also owns newspapers including The Age and The Sydney Morning Herald.
Domain, and the real estate industry in general, has been hard hit by plummeting listings and plateauing home prices.
Project Zipline
Because it is part owned by the public and listed on the Australian Securities Exchange, it has had to explain its approach to shareholders.
Its <a href="https://shareholders.domain.com.au/DownloadFile.axd?file=/Report/ComNews/20200427/02228319.pdf" target="_blank">April 26</a> announcement notes that about 45% of its cost base relates to staff and employee-related expenses.
“We had the option of taking the standard path of reducing hours, stand downs and redundancies, chief executive Jason Pellegrino explained on the <a href="https://www.domain.com.au/group/zipline/" target="_blank">Domain</a> website.
He chose another option: <a href="https://www.domain.com.au/group/zipline/" target="_blank">Project Zipline</a>
employees were offered the opportunity to participate in a share rights program whereby they could receive a percentage of their salary package over the next six months in share rights, or alternatively elect to reduce working hours
The target is a 20% reduction in staff costs, while retaining employee talent and "momentum for the long term”.
It’ll also help align the employees and the organisational interests.
Domain’s group director for employee experience, Rosalind Tregurtha says there has been a 90% take up of the options offered.
Sacrifices at the top
The executive leadership and board are <a href="https://www.mckinsey.com/business-functions/organization/our-insights/how-to-beat-the-transformation-odds" target="_blank">role modelling</a> by taking greater proportions of their own remuneration in share rights: 30% and 50%.
It has had to work quickly so the savings can start from May.
The work has included preparing information packs for managers and employees, briefing managers, asking employees to chose options, working with <a href="https://www.linkmarketservices.com.au/corporate/home" target="_blank">Link Market Services</a> to get offers out and processing the changes for the more than 600 employees on the payroll.
Zipline is a case study of an organisation working quickly with its workers to find a solution that works.
It mightn’t work elsewhere. Other options for businesses include
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offering greater work flexibility including shortened weeks and job sharing
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freezing or limiting recruitment
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restricting or banning overtime
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increasing the scope of jobs
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allowing employees to take accrued leave
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directing employees to take unpaid leave under the government’s <a href="https://www.fwc.gov.au/industrial-action-benchbook/payments-relating-industrial-action/standing-down-employees" target="_blank">stand down</a> provisions
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seeking voluntary redundancies
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It is important to consider, as Domain did, that while demand for their services might have slowed for a time, there is every likelihood that in the not too distant future things will pick up.
The firms that have done all they can to retain their industry knowledge and company experience will be the best placed for revival.<img src="https://counter.theconversation.com/content/137704/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/robyn-johns-159436" target="_blank">Robyn Johns</a>, Senior Lecturer in Human Resource Management and Industrial Relations, <a href="https://theconversation.com/institutions/university-of-technology-sydney-936" target="_blank">University of Technology Sydney</a>
This article is republished from <a href="https://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/coronavirus-redundancies-are-understandable-but-there-are-alternatives-137704" target="_blank">original article</a>.
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j.ballantyne1990-6AQqhLzZaK

Coronavirus redundancies are understandable, but there are alternatives

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The Australian Institute of Architects has ceased trading of its subsidiary Archicentre Pty Ltd on the recommendation of Archicentre’s Board.
The Institute will now proceed to an orderly wind up of Archicentre’s operations. 
Professor Ken Maher, national president, said that while Archicentre has provided a valuable service to members of the public for many years, the Boards of both Archicentre and the Institute - having reviewed its operations, financial position and changes in the market over this period – agreed that the time had come to bring things to an end. 
"For 36 years Archicentre has provided Australians with a wide range of quality architectural services," he said. 
"During this time the market and environment in which Archicentre operates has changed dramatically and what was once a unique and innovative business model has become one of many service providers in an increasingly competitive and densely populated market. 
"An important change during this period has been the welcome improvement of consumer watchdogs, strengthening consumer protections in a way that overarches the services Archicentre was established to provide. 
"The nature of the architectural profession has also evolved. The role of architects has branched out into new and increasingly important domains. 
‘Such changes have strained Archicentre’s business model and financial position for some time. 
‘This was a difficult decision made after careful examination of available options and confirmed by independent financial advice. 
‘Despite the Institute’s National Council and the Archicentre Board having implemented a wide variety of measures over the past two years to return the company to a sound financial footing Archicentre’s financial position has continued to deteriorate. 
‘An escalation in operating costs and the recent expiration of a valuable long-term contract have now rendered Archicentre’s financial position untenable. 
‘The Institute’s decision to bring Archicentre operations to an orderly conclusion is the prudent and responsible course of action that will best serve the interests of all involved - customers, contractors and the broader membership alike. 
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‘The Institute is focusing on its strategy and priorities, concentrating on delivering what is most important to the profession - members services, strong advocacy and education standards - while also highlighting the valuable role architecture plays in the community.
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‘On behalf of the Institute I thank the Archicentre Board for its service and hard work during a trying period. They have acted in a way that exemplifies the highest standard of corporate governance. 
‘We also acknowledge the vision and continued contribution of Robert Caulfield, a founding Director of Archicentre and extend our gratitude to all those associated with Archicentre for the wonderful work that has been undertaken over the last three and half decades.’ 
Arrangements moving forward: 
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Archicentre’s 12 staff, whose employment is managed by the Institute, are being supported throughout the winding up process. Opportunities to re-deploy these staff are being explored. In any cases of redundancy, the Institute will pay all entitlements in full. 
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The Institute will refund Archicentre’s existing customers for any services paid for but not delivered and, where possible, make referrals to other service providers. 
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The Institute will pay all contractors and members for work carried out prior to Archicentre ceasing to trade. 
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The Institute will be notifying all those affected by these arrangements. Customers and contractors seeking further information can do so by calling 1300 134 513 or emailing info@archicentre.com.au 
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Redundancy

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