Manager demoted - suggestions wanted.

[askingaboutbusiness]

I have a friend who has been with a company from the very beginning (3 people and a van to >100 staff), she has helped to build things to a point were the company has received substantial funding but now finds she has been demoted. A more senior person from the industry has been brought in above her and she is no longer on the management team, effectively she has been sidelined. Is this legal? What are her options? Has anyone got any suggestions?

 

[sherman]

Manager demoted - suggestions wanted

Don't know whether its legal or not, but it seems to be simply a legitimate business decision by the owners.

Obviously they decided that while your friend has done a great job up to now, they need a new skill set to take the business forward for the future.

Also, I'd say she hasn't actually been demoted, merely they've added another layer above her?

 

[agencycontractor]

I worked in a company before where they got outside funding.
The downside to this is that the top management are then under a lot of pressure to get results. When things didn't go well , the staff that were regarded as not important were let go.
One of the things they did where I worked, was replace the financial accounts manager with a more senior person. This guy actually did all the wages etc. He also got funding for the company. They held onto this financial accounts person but as soon as things were not going well they let him go as the new senior person was doing all the important work.ie he took over the position of doing the wages ,getting more funding etc.

This person who you say is demoted. Whats her new position like? Is it an important/significant position? What do you think will happen if there was a downturn and they had to lay off staff? It might be a good idea for this person to look for work elsewhere.

 

[ClubMan]

but now finds she has been demoted

Have her benefits changed? Has there been any material alteration to her contract of employment - either unilaterally or by negotiation? If neither of these have been affected then I doubt that there is any statutory come back.

 

[sluice44]

It sounds like the company needed a manager with a different (but not necessarily better) skill set. Perhaps your friend could stay for a year or two & learn these skills before she moves on to a better position.

 

[askingaboutbusiness]

Thanks for all the comments. In answer to some of the questions:

They have put another layer above her - she would previously have been on the "executive" team helping with strategy etc., she is no longer a part of that.

She seems to think that her position is less important than it previously was, however, her salary/benefits have not changed.

I think that sluice44 has hit it on the head, I reckon she would be best to view it as an opportunity to learn new skills from the incoming senior manager. Still, quite galling for her to be treated like this, of course it was done without any consultation! I don't think it's a great way for the company to inspire loyalty in their staff.

 

[Brendan Burgess]

As Sherman says, it sounds like a legitimate business decision.

It also sounds as if it was badly handled. But companies tend to handle these things badly.

Has she a good relationship with the owner? He was probably embarrassed to say to her "Look, you do what you do well and we appreciate it, but we need a heavier hitter at this stage in our development". Most people find it difficult to understand that they do well up to a particular level, but they are not seen as worthy of promotion. If she has a good relationship, she should meet with the owner and ask nicely for an explanation and some guidance on where her career is going. He probably feels guilty about the way he treated her. He may well feel loyalty and gratitude to her as an early employee. He may recognize the awkward position she is in and pay her off. Her new boss may also want to take on his own people.

Brendan

 

[mmclo]

I think the answer to this is obvious but has she any shares or did she put any money in at the start?, presumably not. This is the best way to agurd against this, keep it professional from the start, at least if new blood and money comes in you have to agree or be involved.