Company shutting down? How do you as an HR handle Employee grievances?

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Employee Grievances
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There can be no bigger fear in the life of an employee than their company shutting down or going through a cash crunch. This phase of uncertainty is worrisome for both the employees as well as the company and it is here that the task of an HR becomes delicate. For HR, it is like walking on a double-edged sword where they need to comfort the employees while making sure that nothing swirls down to a mess that no one can manage.  Here are few tips HR needs to keep in mind during a company shutting down, how do you as an HR handle employee grievances?

  • Identify the situation: Being in the Management’s consul, HR has an advantage to perceive the future and weigh the outcomes. Look for tell-tale signs like top management resigning, salaries being delayed, planning to layover workforce, etc. The HR then with the management start to plan about the future course in case things go haywire while avoiding a panic situation in the office.
  • Understanding Employee worries: It is easier said than done. Nevertheless, understanding employee worries is the most important step to any plan. Understand that for many families, this job would be the sole breadwinner and it is normal to panic when problems like bankruptcy or layoffs rise. The HR and management should sit and first plan on how to break the news to their employees and how to cope up with the negativity and stress that incurs. The HR, in those times, should think and present the employees’ perspective and devise a plan accordingly.
  • Maintain Communication with the Employees: The worst reaction during this phase that the management has to witness is to not convey their plans to employees in transparency or to keep delaying the necessary information. HR over here should convey their concern to the management and form an open channel of communication, whereas the management ought to be transparent to its workforce and keep them in loop of all the developments.
  • Let Employees go: When the alarm goes up that something is wrong in the company, it is normal that employees would prefer to walk out and seek employment options. While this can hurt the day-to-day functioning of the current workplace, HR needs to bridge the gap between the management and the employees. It is hurtful for the company to lose employees in mass, but stretching their ordeal is also unethical.
  • FnF Settlement: FnF settlement is a pain point for companies and employees during such a phase, as there is no guarantee that the company will pay the employees after it shuts down its operations. In this scenario, the management and HR should make sure that at least the salary up to that point is paid and they communicate in transparency from start about the situation to avoid mismatch of expectations and the employees do not feel cheated.

We know that the job of an HR is unthankful and tiresome. If you are an HR and have faced such a situation, let us know how have you faced it and we will feature your story in our weekly column.   For other HR related problems, Pocket HRMS has an end-to-end solution for you, complete with an Automated Chatbot to be your helping hand. For more details on the HRMS solution, Write to us at for more details.

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