QUESTION: What issues should be considered when developing a business consolidation or workforcemanagement policy?

ANSWER: Despite the tight labor market, corporations announced 677,795 job cuts last year, the highestnumber of the decade, according to the Bureau of Labor Statistics. Running counter to the downsizing wavewas a massive tide of corporate hiring, often within the same firms.

The dramatic change in the structure of the workforce necessitates having a well-thought-out plan to manageworkforce populations. These key components influence the success of every workforce managementinitiative:

  • Business justification. The character of management is determined by how sensitive business situations likeconsolidation are handled. The company establishes credibility with both the departing and remaining staffby having a well-communicated consolidation plan. A written statement that explains the business reasonsfor the staffing changes is imperative, along with convincing reasoning that discounts layoff alternatives andoutlines the positive outcomes that are anticipated by the company' s actions.
  • Compliance. Close scrutiny should be given to regulatory and contractual obligations when planning anyworkforce initiative. Review plant-closing regulations to ensure compliance with notification laws foremployees, state and local government officials. Written notification to employees will need to includespecific information including the date of the layoff, the business justification of the office closure, the nameand address of the local unemployment office, and the name of the state authority you will be notifying.Provisions in union and employment contracts should also be reviewed in the event these documentssupercede regulated notification requirements.
  • Evaluation. Evaluate job functions and tasks to determine which jobs can be modified, combined oreliminated; then assess the capabilities of the incumbent staff. Most employers would prefer to keep theirbest workers and lay off those who are less productive, regardless of seniority, but elimination byperformance is feasible only if you have done regular performance reviews with objective documentation. Ifthere is no documentation, you cannot eliminate that person' s position for purely merit reasons without facingpossible liability. If you are choosing between equally qualified candidates for layoff, be prepared to showthat the "downsized" workers reflect the demographic mix (race, gender, and age) of your workforce as muchas possible.
  • Impact. Significant attention should be given to workforce notification. The tone set by management isvalidated by how the actions are perceived by employees. Who does the communication, when and how themessage is sent are all critical components. The senior local executive should announce the event early in theworkweek. Action taken later in the week may allow employees to sulk over the weekend and developfeelings of hostility toward the company. Earlier notification focuses potentially damaging emotionalbehavior on productive activities related to a job search.
  • Process. Specific issues that should be addressed in the actual termination procedure include anannouncement letter, a well-defined approval process, drafting of employee release documents (ifappropriate), conducting of exit interviews, continuation of benefit programs, procedures for cleaning outpersonal items, timing of actual departures, security issues and reallocation of job responsibilities.Conducting training for supervisors on change management and how to handle the aftermath of a workforcemanagement action may also ease the outcome.
A brief legal consultation and good planning will help ensure a smooth closing. Outplacement services mayminimize problems and may even prevent lawsuits. Severance will also ease employees' pain of losing theirjob and can be an effective tool for employees remaining behind. And working to prevent the need for futuredownsizing is the best solution for all involved.

Robert Hoffman is principal/CEO of HR Additional information is available at HR

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