Workforce Reductions
From OrgChart.net
Contents |
Overview
There are some inescapable consequences of unpreparedness, especially in a business environment which has apparently lost the sense of stability which kept organizations and business people functioning securely. The reality is, change management is popular right now as the businesses deal with an un-certain future. Shake-ups in the economy have left many organizations flailing, desperately trying to keep their head above water.
When an unprepared organization finds itself in a difficult economic situation, one response is to cut costs. This, of course, means layoffs will happen, positions will be scrapped and employees will have to go as salaries are the biggest operating cost for most firms. In a bad economic spot, “trimming the fat” in this area seems to be the only logical thing to do.
However, if the process of laying-off employees is handled badly, then organizations stand to find themselves in a bigger mess than they started with. Another dangerous aspect of this process is if it is a stressful event, then the likelihood of emotions running high is strong which means judgment could be clouded. In this situation, logic and good sense can easily be defeated.
Minding the Ps and Qs
Since workforce reductions are an inevitability, it is better to have a defined process outlined in a step-by-step format which ensures the systematic handling of the reduction, including: compliance with laws, rules and regulations, abiding with agreements (if any) and the distribution of the appropriate compensation or severance packages to the correct employees.
Reductions in force which are part of an economically motivated decision require the employer to provide valid and sufficient reason for laying off any given employee. This reason must not be discriminatory in nature. Any error in this area exposes the organization to potential lawsuits; the costs of which will defeat the purpose of the reduction in force in the first place.
Selecting the employees for layoffs is a delicate process itself and should be based on uniform criteria, ruling out biases and discrimination. Intelligent software can minimize problems on this count as it is able to feed in objective criteria and administer them uniformly across board. It integrates legal requirements, compliance with rules and other intricacies which might otherwise be overlooked in this overwhelming process.
Remember: care must also be taken to retain critical talent and not allow them to be “washed away” in the process … the cost of losing a promising employee can be immense.
It is also necessary the downsizing organization maintain proper documentation and records of every decision taken at every step so it can be furnished as proof if the need arises.
Communicating Well
What is often ignored as a vital step is: Communication. Management must stress that the impacted employees be treated as humanely as possible. There should be management awareness training of the managers who convey the bad news so instead of treating the situation impersonally, they can exercise empathy and allow the employee to say what they need to say.
Along with this, the employees who remain should be given a clear picture of why the workforce reduction happened and an immediate vision for future. Insecurities and survivor guilt in this group can cause havoc and therefore their questions must be addressed adequately. Clear communication and an open sharing of facts is far more effective in handling baseless fear and rumors than keeping information from employees.
