I’d like to share with you two contrasting examples of how employers recently treated departing and remaining staff. I think it’s instructive for the protection of your employer branding and reputation.
One was well done. Whereas the other was poorly handled.
1. Full disclosure
Due to offshoring and outsourcing by its customers and declining profits, XYZ Co’s CEO and Board decided in March 2013 to make a number of their management and leadership redundant.
Once the decision was made to pare back costs via redundancies, the CEO, CFO, various Divisional Heads and the Chief HR Officer collaborated in identifying the key roles and the specific individuals who would be affected.
It was vital for the leadership team to be able to communicate the rationale to the people affected and equally to all staff left behind.
All those who were made redundant were given 3 months notice and permission to start looking for other roles. Those who found employment elsewhere would still be offered outplacement support with CareerSupport365 – in the event that their new role would not work out.
Importantly, those remaining employees were given the full rationale; explained the benefits the departing staff were provided; assured the business was ‘right-sizing’ and sustainable for at least the next 12 months; given undertakings that in the event business did worsen, that they would also be well-looked-after; and at the end of each month informed by their Divisional Heads of the company’s sales and profit results.
Management also assured staff that there would be manageable increases in workload created by the departing staff. Any unforeseen excessive loads would be heard and managed offshore wherever possible.
While the redundancies were difficult on all staff, those employees who remained after the redundancies experienced increased morale and productivity. The business has improved and it looks like the next wave of redundancies has been delayed.
2. Scorched earth
LMN Co. relied on a pipeline of R&D projects. When business was growing and new products were being developed, the company hired technical experts and engineers. However, when the converse happened, staff were laid off.
The company was led by technical people. HR also reported to the CFO.
The CEO and CFO made the decisions about which roles were to be made redundant and the specific people to be let go without collaborating with the HR Manager. 12 technical roles were affected.
The day before the redundancies were announced, the CEO and the CFO advised the Head of HR that she was to handle the process herself. Incredibly, both the CEO and CFO went abroad the day the redundancies were made.
All staff were let go across a 4-hour span and required to leave the building immediately.
No staff were provided outplacement.
Since the redundancies were made, anonymous and threatening letters have been written by at least one former staff to the Head of HR and also to some staff who remained.
Morale amongst the staff who remained is now at an all time low, with Recruiters picking off some of the remaining talented staff.
The Head of HR has been put under pressure to improve the morale or find that she is out of job herself.
The company’s employer brand and online via social media and online sites like Glassdoor are now poor, creating talent pipeline and client retention issues.
What’s the learning here?
The above contrasts two businesses that made the decision to let people go so as to improve profitability.
But one handled their processes openly, collaboratively and communicated with all staff – those leaving and those that remained – in a humane and decent way.
The other made decisions arbitrarily, without consultation, treated the HR Manager with disdain, mercenarily handled their departing employees, as well as acted naïvely about the collateral damage redundancies potentially create on staff who remain.
If you need to make the tough decision to create redundancies, here are some points to include:
- consider all stakeholders;
- determine communication strategy to create the case with departing employees that uphold an employer brand;
- determine what to say to employees you expect to remain, including assurances about their own career;
- offer outplacement support to departing employees;
- offer counseling to those remaining staff; and
- consider team building/bonding activities that can be deployed to form new relationships and productivity enhancements, following the departure of the employees who have been made redundant.
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Learn more about Greg Weiss here.
