Managing the human impact of change; an insight into what happens when an organisation closes a power station

At our Disruption Circle event this month, we had the pleasure of hearing from Ilona Laurie-Rhodes, former HR Manager at Engie, as we discussed the people issues arising from the closure of the Hazelwood power station and mine in Victoria’s Latrobe Valley.

Hazelwood was generating approximately 25% of Victoria’s baseload electricity generation when the CEO of the site’s owner, Engie, announced to the French Government, in March 2016, they were ceasing their involvement with fossil fuel power generation and specifically mentioned the Hazelwood site. This was news to the Australian management team, the employees and the various stakeholders with an interest in the Hazelwood business.

Naturally, everyone in Australia wanted to know what would happen next but there was no clarification coming from head office as to what the statement meant for Hazelwood and so the Australian management team began planning for a range of possible scenarios.

Ilona shared with us her experiences leading the site HR team and the organisation’s response to what might happen next.

Working with an organisation of engineers has its advantages!

The organisation employed many engineers which Ilona found very beneficial for the challenge the management team was confronted with. Attention to detail, contingency planning and risk management were valuable capabilities to have access to as the next steps were planned.

One of the first tasks the management team undertook was to develop a comprehensive change management plan incorporating the collective thinking of the team. The plan factored in all possible scenarios from partial to full closure. The plan was detailed, identified accountabilities and mapped out a way forward until a final decision was to be taken by the parent company. A summary of the plan is found below.

From a People perspective, the organisation established a number of guiding principles to assist in the planning for the various scenarios. These guiding principles contributed to the policies and practices employed as the year unfolded and the plan evolved. These principles ensured consistency of behaviour, transparency of decision making and allowed each decision made to be considered within a human context.

At this early stage of contingency planning there were only a limited number of people within the organisation who were aware of the plan and range of possibilities being considered.

Another interesting component of the plan, was the importance the team placed on building their own personal change management skills and the need to support each other through what promised to be a significant event irrespective of what option was chosen.

Planning for the human impact of change

In July 2016, we were invited to work with Ilona and begin preparing for what may happen at some yet to be announced date. Various scenarios had to be assessed and plans developed for the impact of the announcement and the impact it would have on the site’s workforce.

The site employed approximately 450 employees directly and another 300 subcontractors. In addition, it was estimated there were another 3-4 people employed externally for each employee on site. The impact of the announcement would have a significant direct impact and ripple effect across the employees and community.

In early November 2016, the decision was made to close the Hazelwood site by the end of March 2017. The HR team immediately put their plan into action.

There were a couple of important things to note about the small site HR team. They were:

  • They were all impacted by the closure announcement. Their jobs were going also.
  • Client focused. They really knew the employees they were supporting. They had the relationships and understood the characters and the likely needs of the employees.
  • Accessible and responsive. They made sure they were highly visible across the site to deal with employee Q&A’s

A series of site information sessions followed the major closure announcement. The purpose of the site information sessions was to provide employees with a road map of the journey they had commenced and the support services available to them with their future transition needs. Support was available immediately, delivered on-site and was personalised to the needs of each employee. This aligned with the principle of treating employees with dignity and respect.

Good career transition support will ensure:

  • It is customised to the needs of each employee. A good provider will ensure the support addresses the transition needs of the employee and is within the client budget
  • Support is relevant, practical and timely
  • It challenges the thinking of the employee. Helps them to understand what they don’t know
  • It provides support in the short and the longer term. Transition becomes reality when the employee leaves the site for the last time. It is in the post leaving phase the employee needs to know there is someone supporting them.
  • The employee is confident in their skills, confident in their ability to sell those skills and confident they will make a successful transition

We believe this aligned with the organisation’s intent to leave a positive legacy with each employee.

Support programs delivered on site for the employees included:

  • Change and resilience
  • Career planning
  • Career transition support including job seeking skills and tools, small business planning and retirement planning
  • The proactive development of an employment network to link employees with new employment opportunities
  • Financial planning information was provided by Services Australia and the various employee super funds

Training funding was made available for each employee with some policy requirements attached to how it was spent.

It is also important the employees are protected from information overload. During a site closure employees are subject to information from a variety of sources and need to make some decisions which they are not used to making. Third parties will sometimes provide incorrect or inappropriate information which only manages to confuse employees during a period of major stress. An independent third party who can assist employees understand the information and make informed decisions is a valuable resource.

What did we learn?

Ilona shared her learnings from the project.

  • A structured communication strategy ensuring frequency, consistency and transparency of messaging is critical.
  • Applying project management principles made the process less overwhelming and ensured nothing slipped through the cracks
  • Stakeholder identification and development of a management plan directed focus to the critical areas
  • The value of a good outplacement service is critical

Additional resources

You can download a free copy of the Definitive Guide to Managing Redundancies and Effective Career Transition.

About

Choice helps organisations manage the human impact of change and assists in building human capability. We are also the Australasian partner of OI Global Partners.