The ‘Right Way’ To Make People Redundant

April 1, 2014

Making people redundant is one of the worst jobs in management. Thankfully, I have personally not had to do it for many years but based on the recent economic situation I am sure there are many of you out there that have recent and painful experience.

There is strict legislation surrounding the redundancy process including the ‘minimum’ payments that can be made. In my experience companies usually pay the very least to comply with the law.

I read an article recently by Mark Bosworth on the BBC News website about a very different approach to redundancy by Nokia in Finland. Having been forced to sell its mobile phone division to Microsoft, Nokia restructured and made thousands of workers redundant. In this case however the support provided by Nokia has created hundreds of new companies!

Nokia launched the Bridge programme, a scheme offering financial help and training to the workers who were about to leave. Matti Vanska, the head of the Bridge programme said “The company decided – all the way from the board to the senior management – that we wanted to do career responsibility as well as we can, beyond what the legal minimum is.”

The scheme was available to 18,000 employees across 13 countries and helped people to find a new job, provided retraining for a completely new profession, or assisted entrepreneurs set up their own companies. In Finland alone 5,000 people received help and 400 new companies have now been created by around 500 entrepreneurs. Every one of them must have fought to call their business Phoenix as they have literally risen from the ashes of redundancy!

Cynics may say that Nokia has done all this for its ex-staff just to generate good publicity. This is denied by Matti Vanska. “We said the individual priority is first, the community priority is second and the Nokia interest is third. I believe that when you do the right thing, Nokia will also benefit – but that was not the primary driver.”

This statement is backed up by the investment, which is a secret that Nokia are not prepared to disclose but they did say it was in the region of tens of millions of Euros!

Some of the businesses have licensed Nokia IP and formed business using the technology while also received seed funding from Nokia.

It is clear that those involved are extremely thankful to Nokia for their support and claim that it is the ‘Finnish Way’ to be fair. It is hard to imagine many corporate businesses doing the same as Nokia in the UK or USA. It is far more likely that the axe falls and the gates are locked leaving former staff to fend for themselves.

What are your thoughts? Should corporate businesses be forced to do more than the current legal minimum? Or should it be a matter of corporate social responsibility at the discretion of each individual business? If I was making a career choice and had the option of Nokia or another business known to axe with no support then I know which I would choose.

Many thanks

Stuart Allen

Trainer & Consultant at MTD Training

http://www.management-training-development.com

(Image by stockimages at FreeDigitalPhotos.net)