In the face of falling oil prices and reduced demands, more and more companies in the offshore industry experience a growing need for making changes and adjustments to their existing organisation.

The question will then be: how can they keep the employees with the best and most relevant skills/qualifications? With thorough preparations and a good process, this is fully possible.

THE RIGHT TO MANAGE
The selection of redundant employees presents particular challenges in downsizing processes, both legally and with respect to personnel policy. However, the starting point under the Working Environment Act is clear. It is up to the employer to decide whether a workforce reduction is necessary and to choose the selection criteria to be applied when identifying redundant employees. The employees must be given information, they must be included in consultations and they must be given an opportunity to provide input. However, the final decision rests with the employer.

SKILLS AS SELECTION CRITERIA
For Norwegian companies in the offshore industry, it is increasingly important to ensure that employees with the right skills stay on after a downsizing process. In an international market, very exposed to competition, continued operations will often depend on the employer´s ability to keep the employees with best skills.

At the same time, many employees expect seniority to be given decisive weight when the workforce needs to be reduced. Even though weight must be attached to seniority and social circumstances in the overall assessment to be made, the legal starting point is nevertheless that it is up to the employer to determine how to weight the selection criteria. Even in enterprises with collective agreements, which often require reasonable grounds for any departure from seniority, the enterprise will have significant opportunities for giving special weight to qualifications when selecting redundant staff.

In staff reductions where the employer wishes to select redundant personnel based on qualifications, it is decisive to the legitimacy of the process that this criterion has a basis in the enterprise’s general strategy and future competency needs. The enterprise must clearly define how its new organisation is to look and how it is to be operated after the reorganisation, and the need for skills should be established in specific qualification requirements for each position. In this way, the company can document the skills and qualifications needed in the new organisation.

MAPPING THE EMPLOYEE’S SKILLS AND QUALIFICATIONS
To be able to assess employee skills against the new organisation’s requirements, it is important that the enterprise has correct and complete information about each individual employee. Mapping of the relevant employees should therefore be made before the selection, where all relevant information is updated and documented. The use of mapping forms and assessment conversations with each employee will ensure that the employer will obtain the necessary documentation and get satisfactory results.
Several persons should quality assure this information and the assessments made.

In an assessment of skills, both formal and non-formal qualifications will be relevant. Formal qualifications are usually simple to measure and document through objective parameters. Discretionary assessments of non-formal qualifications must be quality assured to a larger extent. Also more subjective considerations, such as leadership abilities, performance and interpersonal skills are relevant in making the selection, but here the documentation requirements are particularly stringent.

THOROUGH PREPARATORY WORK AND EFFECTIVE IMPLEMENTATION
A good and goal-oriented downsizing process requires the company to invest sufficient resources in the preparatory phase. If the wrong turning is taken here, it may be difficult to get back on track. Through a meticulous analysis of the company’s situation today and in the future, the management will be able to spotlight and document the need for workforce adjustments and the importance of retaining the right skills in the new organisation.

Involving the employees and their representatives is a key factor to ensure a satisfactory implementation. By involving the employees, the company will ensure that it has the most correct decision basis possible, an understanding of the company’s needs and legitimacy with respect to the decisions made. This will in turn help reduce conflicts and prevent subsequent disputes.

A process that takes a long time will serve neither the company nor the employees. Workforce reductions create insecurity within the organisation and affect the working environment negatively. At worst, a prolonged process may make key personnel find jobs elsewhere. Through proper planning and employee involvement, cuts in the workforce may be implemented efficiently and methodically, for the benefit of both the enterprise and the employees.

THE OBJECTIVE IS A STRENGTHENED ORGANISATION
Many trade unions and employee representatives – also in the offshore industry – express scepticism to the use of qualifications as selection criterion. One reason for this is the lack of confidence in the employer’s thoroughness and motives in making the selection.

However, our experience is that companies that conduct a good and thorough process, where the employees and their representatives are given an opportunity to exert influence and make suggestions, will emerge from a downsizing process with a stronger organisation, well adapted to future needs and challenges.