Executive Leaseback

Maintaining performance during downsizing or business restructuring

What is it?

Organisations contract former managers, who have recently left for reasons of redundancy, voluntary severance or early retirement, via Brooklands Executives Ltd., to minimise disruption / get performance of the restructured organisation up to speed as quickly as possible during the period of transition following downsizing.

When would it be used?

Typically when a job has been made redundant but the new structure/s are not yet up to speed.

Typical examples are:

An organisation contracted out their Environmental Services and their E.S. staff were made redundant, However, for the first 6 months of the contract the organisation wanted to make sure that the change had minimal effect on their ‘customers’, so the ex-manager was given a 6 month contract to manage this project.
An organisation shut two power stations and the staff were made redundant. Six ex-managers were given contracts to liaise with the demolition contractors and other parties as they knew the area and the plant better than anyone else.
A grocery company moved from store coverage to sales via a retailer central warehouse. The field salesforce were made redundant but six were given short-term contracts to ensure that the store product representation (shelf space, stock levels etc,) were maintained during the transition.

Why Brooklands Executives Ltd?

Two Client Service Directors at Brooklands Executives Ltd, Mike Dodds and Clive Bennett, have extensive experience of managing Executive Leaseback programmes and can ensure that any programme is successful and fully legally compliant.

Also, Executive Leaseback is a natural partner to Interim Management, an area in which Brooklands Executives Ltd. excels. There are extensive similarities as managers are contracted for an agreed period to do an agreed job at an agreed rate.

Why doesn’t the downsizing organisation simply keep the managers on?

Two primary reasons:

The helpful ex-employee gets penalised as they cannot get their severance benefits until the work is complete, which could make them rush the work: and they have gone through a redundancy or voluntary severance programme but are they really redundant or not?
The client organisation loses out in circumstances where:
1. It cannot get the overhead numbers fully down quickly
2. It still has to pay all the benefits that the employee was contracted to receive
3. If the company has paid severance benefit but then continues or recommences directly employing those same individuals, it can get heavily fined;
4. The employee contractual situation becomes unmanageable when a job is made redundant but the person is only offered a short-term replacement job.

What’s in it for the redundant / severed manager?

They get their severance package plus additional employment, and money, post redundancy or voluntary severance
It cushions the impact of losing work and helps in the period before getting a new job
While they are committed to the contracted days, most employers will allow them some time off for job interviews
It can form a bridge to Interim Management or Consultancy

What’s in it for the organisation?

It reduces the impact on performance post downsizing
It facilitates skills retention
With limited numbers and for a strictly limited time, it can be highly cost effective
It increases resource flexibility during a time of upheaval
It enhances the organisation’s external reputation: a caring organisation providing help and work for managers even after they have left

How does it work?

After a candidate has gone through the redundancy or voluntary severance process, they are approached by the organisation to ascertain whether they would be willing to work on a short-term contract via a third party. (Not all managers are).
Brooklands Executives Ltd are brought in and put together a proposed contract for both the Client and Candidate
The rates to the client are grossed up to include N.I., notional holiday and sick pay and B.E.L. margin
There should be a gap between employment ending and the contract beginning, and the project objectives must be clear (and clearly different to their previous job), to comply with HMRC regulations.

How did it start?

Executive Leaseback started in the early 1990’s when IBM ran their first downsizing programme. The ensuing period was highly problematic and customer service suffered. The answer was to get some of the managers back to ensure that the new structures quickly picked up the pace: but they could only be brought back via a third party (without jeopardising severance terms).

Following the success of the IBM model, Executive Leaseback was extended to B.T. and many of the major Utility companies. It has recently been used by a major energy company.