| Golden Handcuffs and Soft Landings |
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VANCOUVER BUSINESS JOURNAL January, 2001 Management Concepts JONNIE MARTIN Managers cringe at having to deal with the trauma associated with layoffs and terminations. It is probably the manager’s least-favorite task, and often they gird for the battle by becoming tough and brittle. That is unfortunate because it is the least-effective way of dealing with a difficult issue. Every day, businesses downsize, are sold, or close their doors permanently, and the workforce is necessarily affected by those changes. Careful and prudent management of a company will decrease these events, but layoffs and termination will always be a part of the business scene. It’s how you handle the situation that makes all the difference. GOOD COMMUNICATIONS Open and honest communications about the pending change lays the foundation for a workable process. Too often companies will not discuss possible layoffs or plant closings, fearful that employees will panic and leave. But there are no secrets in an organization. Without real information, the company grapevine will fill the gaps with rumor and innuendo, which fuels greater panic and the exiting of valuable talent. Several years ago a company decided to move to a different location, only about 30 miles away. Management was not open about its plans and soon rumors of a shop closing were rampant. By the time the actual plan was revealed, over half the employees had left for new jobs. For many of the employees, the new location was a great deal more convenient, and undoubtedly most would have stayed had there been early, open and honest communications. STRATEGIC PLAN: When you have decided upon a staffing reduction, senior managers should create a strategic plan as to how the business will function after the downsizing. Unless there is some kind of legal limitations (such as employment or union contracts), your aim is to match the best of your current talent against the new jobs identified in the strategic plan. I helped a California company make just such a restructure. Not only was the organization moving away from a sales focus to a maintenance mode, they were also dramatically decreasing in size. As they designed the new job descriptions, staffing emphasis shifted from narrow specialists to broad-based generalists. STEPS AND STOPS AND STARTS Conventional wisdom encourages companies to do their downsizing or staffing changes at one time — rather than staged. It is ideal to reach a point of definition and decision, so that people can move quickly into the healing phase. Unfortunately, that is not always possible. Sometimes change must be staged and measured for impact. Some companies are forced, by the nature of their business, to phase-in a close-down. Research and development people go first — then marketing people — and so on. Regardless of the process you are forced to use, you must be as open and honest with people as you can be. Do not lie to them. GOLDEN HANDCUFFS If there are employees that you particularly value, or that you must retain to ensure an orderly size-down or close-down, then approach these people personally and offer incentives to stay. I once worked for a company in transition, where the owner needed to retain his core officers for two years, so that he could earn his staged payments. He did this by offering us golden handcuffs — a share of his earn-out — if we navigated the company through a successful transition. It is not always necessary to expend dollars to ensure a valued employee’s continuation with the company. Sometimes it is as simple as a personal discussion. If you know the employees that you plan to retain, let them know this information. They will not assume. Some years ago, I facilitated the restructure of a company. I counseled the officers to solidify their relationship with key employees, but not everyone did so. One day, one of the most valuable of the employees dropped by my office to inquire about the planned date of her departure — so that she could begin her job search!! THE HUMAN ELEMENT There is a great deal of human trauma involved in the termination of an employee — trauma that can be lessened by considerate treatment. I have known companies who would fire a person and order them to clear out their desk immediately. In comparison, compassionate companies give employees notice of their impending termination and allow them time off to look for alternate positions. They create a broad set of resources to help their employees in their search, providing job skill training, resume building, placement services, internet access, and so on. Even if the timeline is quite tight, intent and style can make a difference. A corporate executive I know described a brief but humane process that he managed as part of a downsizing of a company. When a person received their notice, they were given a transition buddy for the day, who walked them through all the paper-work, introduced them to the resources available, accompanied them to an orientation, helped them unpack their desk, and even gave hugs where needed. Be as considerate and as sensitive as you can in the process. Human lives are being affected — and not just the lives of those you terminate. There is grief and guilt for the employees that remain. Remember that your treatment of exiting employees sends a message to those who remain, as to your true value system. Recently one of my clients had to lay off a worker due to slow production, and she was overwhelmed with the emotion of it all. “I am so sorry that we have to lay you off and affect your family’s income,” she sincerely told the worker. He responded to her by saying “Please don’t worry about me. I will be fine. I have been laid off before. But this is the first time anyone ever cared about me and my family. When you are ready to re-hire, I want to be first in line.” |