The Carillion collapse and HR’s important role in a crisis

Tue 13 Feb 2018 | Thought Leadership

Carillion was once a leading international integrated support services business – until it’s recent spectacular collapse.

Until recently, they employed around 43,000 people and operated in the UK, Canada and the Middle East – but with an uncertain future for Carillion, thousands stand to lose their jobs.

One of Carillion’s major contractors, the British Government, has reassured employees working in schools, hospitals and military contracts that they would continue to be paid. The terms of the deal agreed in the government’s Insolvency Service has meant that they will front the bill until new suppliers can be found. However, no payments have been made as of yet – The same deal was not granted for the private sector and many construction sites have stopped work.

With this billion pound organisation going into liquidation, we have looked at the important role in which HR plays during this type of crisis.

  1. Communication Is Key

It is vital to communicate with employees before, during, and after a crisis in order to stop rumours, and essentially let people know what’s going on.

Employees will no doubt go into a panic and worry about job security, therefore it is important to be transparent and give consistent information to anyone likely to be affected. Open communication is necessary – so it’s advised that contact details are shared, such as a specified email address, phone number or designated company page. In terms of Carillion, it will be paramount to include information regarding whether employees will still be paid, and whether they should return to work. Job security will be at the forefront of employees minds at a time like this.

  1.  Have a solid contingency plan

The collapse of Carillion has put thousands of jobs at risk. In a crisis such as this, HR may need to prepare for a hiring surge and creation of new contracts in order to complete outstanding work – once the scenario has settled. On the other hand, jobs will be lost and panic will spread. In this circumstance, HR can provide an outplacement service. HR will be keen to support employees who are exiting the business (voluntarily or involuntarily) as a result of the Carillion collapse. As part of this service, It will be important to help former employees transition to new jobs and help them re-orient themselves in the job market.

As a result, a solid contingency plan is imperative – not having an effective program in place will only increase problems that employers may encounter.

In order to safely navigate difficult scenarios, it’s important to have a process set in place and communicate this to all employees.

HR has a strategic role and responsibility to ensure their organisation is aware of internal vulnerabilities and ensure their crisis management plan covers all potential risks and concerns. Essentially, HR will need to act as a point of contact for employees in this scenario and they will need to utilise all their tools and know how to practically support employees in this crisis.

  1. Work together

It’s important that all new employees are properly informed of company processes. Senior management may also need additional coaching on how to work with their teams during and after a crisis.

In order for the business to survive this turbulent time, it is important to quickly identify and understand the myriad of employee challenges at hand. Moving quickly to implement decisions will be hugely valuable for the survival of the company. The support and commitment that an organisation will need from its employees during and after a crisis can be facilitated by HR professionals, who understand both the business and employees’ perspectives.

HR will have to contend with the challenge of external factors during a crisis, such as economic expectations, geographical locations and legislation. Planning for the worst case scenario, such as the total inability to use the organisation’s resources and infrastructure, (as seen in such cases within Carilion) will enable the business to react better in future situations.

  1. The Aftermath

After any business crisis, HR will face a period of uncertainty. It is important for the department to be aware of the impact that the crisis has had on employees – and also the impact it can have on their own department, as realistically no one’s job is safe in a crisis such as this.

Employees, their family and even the community will often feel stressed, therefore it is important to help all those associated with the organisation when possible. It’s a good idea to have all company policies available on the website and in the handbook, so they are easily accessible.

Human resources face huge challenges (including their own), however, they can effectively prepare their organisations to respond better to the complexities that come in crisis’ such as the liquidation of Carillion, through taking a systematic and capability-driven approach. HR’s role is to represent the human side of the organisation and support those affected.

For more information on Hensen Associates visit our insights page.