Author: Georgia Russell, Executive Director – Consulting & Product Innovation at shilo.

As we are now well and truly into FY26, many organisations are navigating the aftermath of restructuring—whether it’s a recent shift or one still unfolding. While restructuring is often necessary to adapt to market conditions or strategic priorities, its impact on people, culture, and performance can be profound and long-lasting.

The Human Side of Restructuring

Restructuring isn’t just a structural change—it’s a psychological one. For those who remain, the experience can be marked by uncertainty, survivor guilt, and a loss of trust. These emotional and cultural aftershocks can quietly undermine productivity, engagement, and retention if not addressed with care.

Common post-restructure challenges include:

  • Survivor guilt and emotional fatigue
  • Reduced psychological safety
  • Disrupted team dynamics
  • Potential absence of direct leadership
  • Loss of clarity around roles and purpose
  • Increased turnover and absenteeism

Best practice in this space means going beyond communication plans and transition checklists. It requires a deliberate focus on mindset, culture, and capability— ensuring that teams feel safe, supported, and equipped to navigate change, whether it’s a whole-of-organisation restructure or a targeted business unit shift.

A New Compliance Landscape: Psychosocial Safety

Adding urgency to this conversation is the introduction of Victoria’s new psychosocial safety legislation, which comes into effect on 1 December 2025. These regulations require employers to manage psychosocial hazards with the same diligence as physical risks.

Key obligations include:

  • Identifying psychosocial hazards such as high job demands, poor change management, or lack of role clarity
  • Implementing higher-order controls (e.g., redesigning work systems or improving leadership practices)
  • Reviewing and documenting risk controls—especially after significant workplace changes like restructures

This means that restructuring is no longer just a business or HR issue—it’s a compliance issue. Organisations must now demonstrate how they are proactively managing the psychological impact of such a change.

From ‘Surviving’ to ‘Thriving’

To move forward effectively, organisations need to shift from a survival mindset to one of renewal. This involves:

  • Redesigning operating models with clarity and purpose
  • Rebuilding trust and engagement across reshaped teams
  • Addressing psychological safety and emotional wellbeing proactively and head-on
  • Balancing cost imperatives with human-centred leadership and the desired people experience
  • Investing in capability uplift to support leaders and new ways of working

Done well, restructuring can be a catalyst for cultural renewal and strategic clarity. Done poorly, it can leave lasting scars that hinder performance and erode trust.

Making FY26 the Year of Rebuilding with Purpose

Restructuring is a defining moment. It tests leadership, culture, and resilience. But it also offers a unique opportunity to reset—to build something stronger, more aligned, and more human.

If your organisation is facing into restructuring or preparing for what’s next, now is the time to act. With the right mindset and support, life after restructuring can be not just about recovery—but about reenergising and reinvention.