Reorganisations and reward

A reorganisation is a structural and significant change within the organisation. You could for example think of a change in organizational design such as a merger of departments, sunsetting a division, letting go of certain employee groups, or building a new entity.

Bexer supports with the development, communication and implementation of rewards & benefit changes during a reorganisation.

Enhancing profitability

Sometimes a reorganisation is required to quickly enhance the profitability of the organization. In such cases a headcount reduction is often a prerequisite. Bexer has ample experience with the facilitation of downsizings in line with Dutch laws and regulations among which the afspiegelingsbeginsel.

During a reorganisation it is important to not only review headcount but also to analyse the composition and size of the reward package provided to employees. For example think of a benchmark of rewards & benefits against relevat peers, an assessment of the cost effectiveness of current policies and analyses to identify short-term opportunities to save costs.

Of course labor costs should never be assessed in isolation. It is crucial to take the broader people and talent strategy into account to avoid losing much-needed people. For most organization people make the difference. During a reorganisation it is crucial to clearly explain why certain impactful measures are needed to ensure the future of the company and how these measures will contribute to a better and positive future. Similarly, consider using rewards as a retention mechanism for critical and scare roles to ensure you have sufficient bench strength to quickly pick up the pace again after the reorganisation.

Transitioning from a CLA to a company reward policy

A change that has been ongoing for quite some time now within the Netherlands is the way in which organizations add value and earn money. Think for example of transitioning from manufacturing to design and R&D or from people-delivered services to a digital portfolio.

This trend significantly affects many aspects of the organization, one of which is reward. Organizations which still have a conventional or traditional reward & benefits package often notice that the current offering no longer fits the needs and wishes of the changed workforce. In some situations the organization’s reward & benefits package is bound by a CLA. The transition from a CLA to a company reward policy could be a good solution in this case. Potential advantages of such a transition are more freedom to shape the employee reward package, flexibility to tailor rewards to different employee groups or even the individual wishes of employees, and no longer having different plans for management and the rest of the (ex-CLA) population.

In certain cases it is not possible to move the entire workforce out of the scope of a CLA. If this applies it is oftentimes still possible however to have part of the workforce transition from the CLA to a company reward policy.

Harmonisation of reward & benefits packages

Sometimes an organization works with multiple rewards & benefits packages for similar employee groups or employees working within the same function. This is often due to the past (takeovers, mergers, etc.).

In most cases this is not ideal. In such cases the harmonisation of rewards & benefits can result in several advantages:

  • You provide a clear signal to employees that the organisation will now really continue as ONE company without any inexplainable differences between comparable employees.
  • Enhance employee appreciation for the rewards package and potentially enjoy lower personnel costs.
  • A simpler reward policy which is easier for employees to understand. Oftentimes simpler policies are also more cost friendly to maintain.
  • Fairer and therefore more appealing reward policy (no groups that earn more than others without valid reasons).
Read more about when and how to harmonise

A diversity of rewards & benefit packages is often the result of the past. One could think of an accumulation of policy changes for which current staff received long-term guarantees time and time again. The effect of such a process is that new hires receive significantly different rewards that long-term employees. Other situations where harmonisation of rewards & benefit packages are in place are for example mergers, joint ventures and takeovers.

Bexer approaches harmonisation projects with an open mind, from salary to pension and from board to works council. A harmonisation project is often complex and impactful. The Bexer process works. We start of with an open mind and develop strategies that are fact-based and supported by a variety of quantitative analyses. Next we determine the impact of policy changes, now and in the years to come, and explain to stakeholders why the change needs to happen and what the impact will be for all involved. We support management and HR with decision-making. Once the route is clear the main part of the harmonisation project starts. Bexer supports the organisation from start to finish to realize a successful implementation. We know that harmonisations have a major impact on people. Impact that goes beyond technically understanding changes in bonus plans, pension and mobility policies. We form a team together with the client during the negotiations, communication and roll-out.

The Bexer approach

Bexer is a new and refreshing player in the field of rewards, benefits and people analytics. New, but also with decades of experience, we love to use our expertise to support clients during reorganisations. We start of by establishing the reasons for the reorganisation, a shared sense of urgency. It is incredibly important to establish clarity on the need to reorganise. A consistent and compelling storyline, supported by the board and management, is a prerequisite to convince employees and social partners of the need for change.

Next we start the preparations. We determine the legal framework by taking inventory of how current rewards and benefits have been legally agreed upon and by establishing the legal role of employees, works council and unions in the reorganisation. In addition, we establish the possible routes to reorganise, what you can and cannot do, and determine the impact for employees, the organization and the company reputation. In this phase we will also conduct analyses and facilitate working sessions to determine the most appealing scenario’s and to calculate the detailed (financial) impact per scenario. Once all options are one the table we will support with decision-making and storyline-building. Once the route and roadmap are clear we will determine how to communicate on the reorganisation and how to establish buy-in from all stakeholders.

With the preparations behind us the approval process commences. Depending on the change we will need involvement and approval from individual employees, the works council and/ or unions for certain parts of the reorganisation. Bexer can support with meetings, negotiations and communication.

Once the required consent is obtained, the implementation phase kicks-off. Possible the reorganisation has resulted in some unrest within the organisation. In this phase clear and compelling communication toward managers and employees is key. Personalised communication, supported by impact calculations, is often required to provide employees with clarity on the change.

Rogier Kerkhof
Rogier KerkhofPartner
+31 (0)6 5793 9491

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