There are a number of reasons to consolidate business locations. Maybe your company has outgrown some of its present facilities, made new acquisitions, or experienced wide variations in demand or production. Typically, the reasons fall into one (or more) of four main categories.
The Rationale for Consolidation
Here are some of the key drivers of consolidation:
- Cost efficiency: Reducing operational costs by minimizing real estate expenditures.
- Enhanced collaboration: Improving team synergy by co-locating departments.
- Strategic growth: Positioning the company to capitalize on new business opportunities.
- Resource optimization: Efficiently utilizing resources and infrastructure.
Recognizing these drivers allows your business to tailor your consolidation strategies effectively, aligning them with broader strategic objectives.
What to Expect
Consolidating business locations is a complex endeavor that involves not just logistical challenges but also significant human resource considerations. Determining which staff members to bring along to a new location and how to support those who won't be transitioning is a difficult process.
This article will guide you through strategic decision-making processes, ensuring you align workforce capabilities with business objectives while maintaining employee morale and organizational culture.
Crafting Your Plan
Assessing Workforce Impact
Understanding all of the impacts on your workforce is critical. A thorough assessment will help you identify potential challenges and devise strategies to address them.
- Employee relocation: Evaluate the logistics of relocating employees, considering factors such as housing, commuting, and family needs.
- Role redefinition: Assess how roles may change and prepare employees for potential shifts in responsibilities.
- Skill assessment: Plan assessments to identify skill gaps among your employees.
Communicate Your Plans
Inform your workforce early in the process. Solicit feedback from employees to understand their career aspirations and willingness to relocate.
Assessing Core Competencies and Skills
To determine which staff members are ready for transition, begin by assessing the core competencies and skills essential to the success of your consolidated operations. Conduct a comprehensive skills inventory to identify employees whose expertise aligns with your future business needs. Consider both technical skills and soft skills such as adaptability, leadership, and problem-solving abilities.
Identifying Key Roles and Functions
Identify key roles and functions necessary for the new location. If there are people at multiple locations performing the same tasks, choices will have to be made. Review the strategic goals of the consolidation and the specific roles that will drive these objectives forward. Evaluate which positions are critical to maintain continuity and performance in the new setup.
Deciding Who to Transition
Choosing who to transition is not merely about selecting high performers; it's about aligning workforce capabilities with strategic goals.
Evaluating Performance and Potential
Conduct a thorough performance and potential evaluation of your current workforce. Use this data to identify employees who consistently deliver results and those who demonstrate potential for growth. High performers with the potential to adapt to new challenges are prime candidates for transition, as are employees with sought-after skills and education.
Cultural Fit and Adaptability
Cultural fit and adaptability are critical factors when deciding who to transition. Employees who embody your organizational values and demonstrate a willingness to embrace change are more likely to thrive in a new environment. Assess their historical adaptability to change and their alignment with the company's culture.
Offering Support to Non-Transitioning Employees
The decision to not transition certain employees should be handled with empathy and strategic foresight. Offering support to these individuals is essential in maintaining organizational morale and reputation.
Severance Packages and Benefits
Provide competitive severance packages to employees who are not transitioning. This not only demonstrates goodwill but also supports them during their transition out of the organization. Clearly communicate the details of these packages to ensure understanding and manage expectations.
Career Transition Support
Offer career transition support through outplacement services or partnerships with talent agencies. These services can include resume writing, interview coaching, and job placement assistance. Supporting your employees in their career journey reflects positively on your organization and can mitigate negative sentiments.
Internal Opportunities and Retraining
If employees fail to meet your skill and education parameters—or if they elect to stay in place—explore the potential for internal opportunities. Retaining valuable talent within the organization, even in different roles, can be beneficial for both the employee and the company.
Navigating Vendor Consolidation
Location consolidation is an excellent time for vendor consolidation as well. Assess your current vendor relationships to identify which partnerships are essential for the consolidated location. Evaluate factors such as service quality, cost-effectiveness, and alignment with business objectives. Streamlining and eliminating duplicative or mismatched processes will save time and money in the long run. For more about the benefits of a monolithic onsite management system, see Optimizing Costs with Onsite Management.
Negotiating Vendor Terms and Agreements
The consolidated operations will necessitate new terms and agreements with the vendors you decide to retain. Ensure that the agreements are flexible enough to accommodate future changes and growth. Clear communication with vendors about your consolidation goals can facilitate smoother negotiations.
The Importance of Transparent Communication
Transparent communication is the cornerstone of successful location consolidation. Keeping employees informed about the rationale behind consolidation, the decision-making process, and the implications for their roles fosters trust and reduces uncertainty.
Regular Updates and Feedback Loops
Implement regular updates and feedback loops to keep employees informed throughout the consolidation process. This could be in the form of town hall meetings, newsletters, or dedicated communication channels. Encourage questions and provide honest answers to maintain transparency.
Addressing Concerns and Building Trust
Address employee concerns promptly and empathetically. Building trust during times of change is crucial for maintaining morale and minimizing resistance. Demonstrating that the organization values its employees and is committed to their well-being can foster a positive transition experience.
A Success Story
A Fortune 500 food manufacturing company in the U.S. had plans for a major geographic reorganization—consolidating people and resources from nearly 30 locations into just six. The company also wanted to determine which associates to transition.
Manpower was chosen to lead the effort. We developed a robust transition strategy that started with an assessment of all current associates to determine their educational compliance and engagement. Approximately 13% of the workers were deemed non-compliant. Manpower recruiters worked with the non-transitioning employees to help them find new roles, while simultaneously sourcing new talent to backfill their spots. As a result, the company was able to transition seamlessly to the new locations with no interruptions in service or production.
The Takeaway
Consolidating locations and transitioning staff is a multifaceted process that requires strategic planning and empathetic execution. By assessing core competencies, evaluating cultural fit, and offering support to non-transitioning employees, organizations can navigate this transition effectively. Transparent communication and strategic vendor consolidation further contribute to a smooth transition, ensuring that the organization emerges stronger and more aligned with its strategic goals.
From employee assessments to talent sourcing to transitioning and managing your workforce, Manpower is here to help. Learn how.
