Reference no: EM132799060

Scenario

Apex Work Skills Pty. Ltd. (AWS) is a private Registered Training Organisation, with a student enrolment of 2000 and approximately 50 training staff employed on sessional or full time basis. The RTO has about 30 administration staff.

Traditionally AWS has delivered nationally recognised training courses in construction and business management. Since last year AWS has added qualifications in real estate and property services to their scope of registration.

The CEO of AWS wants the RTO to be known as the best in the country. Recently she has invested over a million dollars in building state of the art facilities, such as new classrooms, workshops, tools and equipment. AWS uses conventional methods of face-to-face training delivery and these facilities are important for classroom delivery.

AWS always employs suitably qualified and experienced trainers and assessors. In order to ensure compliance with trainer/assessor requirements, AWS has committed substantial funding towards the professional development of its trainers.

AWS has three student cohorts - international fee paying, domestic government funded, and domestic fee paying. Of these, international fee paying and domestic funded are the biggest revenue streams.

International students pay full course fees for their study, while AWS has been receiving government funding for delivering vocational training programs to domestic Australian students, based on the student's eligibility for receiving funding. The company has been relying on this funding to cover the expenses it incurs in training students; therefore, this is a very crucial source of income. AWS strategic plans and business plans are based on the assumption that the RTO will continue to receive government funding as a source of income.

However, AWS has recently lost a government-funding contract that could have resulted in an additional income of $3 million for the company. As a result of this, the company will not be able to achieve planned financial growth for the next financial year. The income from international students alone is not sufficient to achieve planned financial growth. AWS must implement an immediate 30% decrease in the expense budget in order to achieve at least break-even point.

In response, the AWS Management team has been meeting behind closed doors for the last month, and has decided to cut 30% of its training staff (15 long-term contracted trainers). The company will reorganise its operational structure as follows:

• 15 full-time training positions will be made redundant
• trainers' employment terms will be re-negotiated to ongoing casual basis
• any new trainers will be employed on an ongoing casual basis
• all managerial and non-academic positions will be maintained
• trainer rosters and payroll costs will be adjusted based on student numbers for each new intake

The implications of these changes for the strategic goals of AWS will be significant.

There is a strong possibility that the quality of training provided at AWS could be affected by the afore mentioned operational changes in the following ways:

• sudden drop in training staff if current trainers are not willing to re-negotiate their terms of employment and there is a lag in recruiting new trainers
• higher error rate in processing student data (such as assessment results, attendance, etc.) due to a constantly changing roster of staff, unless processes are standardised and all academic staff are thoroughly inducted prior to commencing roles
• greater reliance on offsite/ self-paced training using online tools for domestic students, in order to reduce trainer costs and overhead costs associated with classroom based training
• negative impact of reduction of resources on quality of training

In these circumstances, where redundancies are involved, it is also important for AWS to focus on eliminating workplace relations problems, and conduct successful negotiations with employees.

Employees of AWS are aware of the financial loss and understand that some level of staff reduction will be necessary, but, so far, no formal communication has gone out about the extent of cuts, timing, etc.

Most employees have a negative perception towards the designing and implementation of redundancy, and the longer it takes, the harder it will be to manage negative perceptions regarding the objectives and ideas of retrenchment.

As is to be expected, employees are very nervous, and as management decisions are not yet publicly known, there are many rumours among staff about who and how many jobs will be eliminated, and whether any current trainers' employment terms will be renegotiated. Overall morale is low.

Cooperation among units has greatly decreased as everyone is concerned about their own future and productivity is starting to suffer.

Some training staff, who are very good performers, have begun looking elsewhere for work opportunities even before redundancy plans are announced.

The company needs a change management strategy and plan to ensure a smooth reorganisation of its operational structure.

AWS wants to do the reorganisation very professionally and will hire an outplacement service. Outplacement is a support service provided by a consultancy firm providing practical advice, training, workshops and transitioning to jobs, to retrenched employees.

Any changes need to be implemented fairly quickly, over a period of 3 months. Adjustment to budgets will be reflected in modifying:

• number of full-time trainers
• payment terms from clients
• training modes and timelines
• non-essential equipment upgrades
• spending on staff Christmas party

Redundancies need to be actioned on priority so that teams can be reshuffled and work can carry on.

Part A - Prepare a change proposal

You are the Learning and Development Manager of AWS. It is November 2019 and you are tasked with preparing a change management plan to reduce budget and manage redundancy over the next 6 months.

Prepare a change proposal detailing change requirement for the organisation.

Part B - Role play: Discuss change requirements with CEO and finalise priority of changes

Conduct a meeting with the CEO and Board of Directors of AWS, to discuss the changes you have suggested in your proposal, and the priority, and seek their inputs and approval on the same.

Part C - Role play: Consult specialist

Following your meeting with the CEO of AWS, conduct a meeting with Kate Lee of Oz Careers, who specializes in providing outplacement services and redundancy management to businesses.