Effective Downsizing Enables Corporate Re-Recruiting
If you' ve ever had to " downsize" an employee, you know it' s an agonizing experience. Most of us have a visceral aversion tohurting another human being, and losing one' s job almost always comes as a crushing blow. Furthermore, from a companyperspective, downsizing is risky business.
Today' s stagnant economy has a way of morphing into tomorrow' s booming one, and in time, you may want to re-recruit andrehire the very people to whom you' re issuing walking papers. But even more importantly, the way a company treats releasedemployees greatly affects the morale of those who haven' t been affected by the layoff. In other words, it' s time to learn the fine artof friendly downsizing.
" Never, never, never burn internal or external bridges," says Lawrence Stuenkel, senior partner of outplacement firm Lawrence& Allen. " Friendly downsizing goes beyond your company policy book. It is the small things you do that let people know you care abouttheir well being. Let them know you will help as much as possible in the transition phase. This helps both those leaving and stayingwith the company."
Stuenkel, author of From Here To There: A Self-Paced Program for Transition in Employment, a comprehensive new bookand suggested resource for separated employees, has these tips for downsizing the right way to preserve employee relationshipsand perhaps turn today' s downsizing victims into tomorrow' s recruits:
Don' t try to keep secrets. Employees know how many shipments are going out, if sales are dropping, if things are changing.
As soon as possible, communicate with all employees that the company is facing difficulty and is evaluating various methods tohandle the problem. Then, decisions to downsize will come as no great surprise. Furthermore, it' s a great step toward establishingcredibility.
Get important information on paper. Before informing an employee that he or she will be separated, have Human Resourcesprepare a full written explanation of benefits including profit sharing, vested pension rights, stock options, any bonus arrangements,medical insurance continuation or conversion of policies, plus unused vacation days. It is crucial to know that people are not in theright frame of mind to understand benefits during the time of separation. Be clear that this is a lot of information and they are notexpected to grasp it all, but you are available to talk at anytime to review it.
Check to see how the separation will affect the person' s pension credits and other important areas. You may want todelay or restructure the terms of separation based on what you learn about how it affects long-term pension benefits. And makesure you understand how the reduction affects protected classes (people over 40 are an example of a protected class).
Plan separation meetings carefully. Separation meetings should take place as early in the week as possible and early in theday. People are fresher and psychologically stronger in the morning and thus better able to absorb the impact of a termination than ifthey are confronted at the end of a hectic day or week.Separation should be done one-on-one and conducted in a closed-door environment. Start the meeting with something like: " Iwould like to share with you some recent business decisions that are going to affect the company. These decisions are going toaffect several individuals; one of those individuals is you." Be certain to give the same reasons to each employee because they willcompare notes.
Details are important. Company property such as keys, credit cards, etc., should be collected during the separation meeting.Computer passwords should be changed immediately after the separation meeting.
Understand human nature. Some separated individuals may be too stunned to ask questions, others may react with a plethoraof questions. If you do not know the answer, don' t be afraid to say " I don' t know. I' ll get back to you." Avoid phrases like " I' ll seewhat I can do," which may imply preferential treatment.
Be aware that vendors can spread misinformation. Don' t forget to arrange for a transition call with vendors, who can be asource of negative rumors if not informed appropriately.