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There are so many other options to explore to
position a company well with a board or to
improve efficiencies or to post solid cost to
revenue ratios. That is not to say that layoffs
are not a viable strategic option that, at
times, has to be executed.
Layoffs are sometimes the best route to take.
But when they take place, there are definite
challenges that have to be faced.
Should Layoffs Be
Your First Choice?
Other types of cost savings can offset the
gains received from downsizing. There may be
opportunities that emerge to expand your
market, shore up your position in your market,
or move into a new market even during a
downturn. In this way, the gains can be felt
without the pain; because we shouldn’t kid
ourselves - personnel cutbacks are painful.
Studies show that it is the most stressful
action that managers have to take as part of
their job description.
Avoid the Need for a
Layoff
Determining the dollar spend that has to be cut
in the organization is the first step. A
re-look at the strategy has to be the next
step. Questions need to be asked, like: Have
all possible future scenarios been explored?
Are the strategic goals the right ones for the
envisioned future? Has the budget been
proportioned in alignment with the strategy?
Where in the organization have results not been
forthcoming, and why? Are there unexplored
external opportunities to analyze and pursue?
Has the current and potential customer
interface been fully explored? Could there be
new markets for the business?
This is also the time to challenge the
processes followed in the organization. With
process flows optimized, the organizational
structure may have to change, with different
work profiles emerging. But this does not
always have to entail layoffs. It may just
require people being re-skilled, multi-skilled,
or reassigned. Sometimes employees would be
willing to cut their hours by 10% to allow all
to keep their jobs and then you have your staff
well placed when the times change for the
positive. Sometimes a perusal of the workforce
profile may prove useful. One of our clients,
the largest foreign exchange earner for a
country in Africa, felt they needed to trim the
size of the workforce. An action like this
would have gone beyond the economic arena to
have a deleterious political and social impact
on the country as a whole. A simple look at the
age profiles of the workers revealed that a
large percentage of the required reduction in
staff would occur anyway through natural
attrition over the following three years as the
workers retired. Factoring in losses of the
workforce due to the scourge of AIDS, gave the
organization their projected staff size without
having to go through the added agony of a
layoff. Quality improvements and waste
reduction may sometimes be sufficient to stave
off downsizing. I have even witnessed the
formation of a special task force out of “at
risk of layoff” individuals or teams, to seek
out opportunities and do R&D in order to
forge an economically viable place for
themselves in the organization.
Put P’s in
Place
Together with an action plan for layoffs in
terms of what needs to be done, there needs to
be a commensurate communication plan. This is a
plan that needs to take into account the
affected individuals, all others left in the
organization, and the external marketplace or
customer base. It is crucial to get the timing,
as well as the content of all communications,
just right. The organization could also have a
policy that provides guidelines on how to
address cutbacks in personnel. This will ensure
a standardized fair way of handling the
situation across the organization and make sure
it meets legal requirements. It should
demarcate processes to follow and acceptable
practices to put in place.
Take a 3-Pronged
Approach
Being part of a layoff has deleterious
consequences for the people directly involved;
not least of which is financial. Having support
during this time lessens the negative impact
and can shorten the time to be on the upswing
again. The organization can provide support in
the areas of financial acumen, counseling, and
career or business opportunity development.
Within the financial arena, it would mean
transferring skills to effectively manage the
severance package received, as well as how to
budget with less and still retain your assets.
Counseling could address both the laid off
employees and their significant others. This is
to ensure the transfer of coping skills to
traverse the adversity and come through the
change in as positive a manner as is possible.
Career development could entail assistance with
resume preparation, and action planning. It
could also encompass personal enabling skills
development in terms of interviewing skills,
business planning skills for entrepreneurial
ventures, and handling change skills. The
extent of all this support would be dependent
on resources that the organization has
available during the time of transitioning
people out of the organization. A lot of these
activities do not have to be expensive for the
organization if tackled creatively.
Work with the
Walking Wounded
It is a big mistake that many organizations
make - ignore the people who are left working
in the organization. They are also affected by
the layoffs. For one, some may feel survivors’
guilt; that friends of theirs have been
affected but they have their jobs still. From a
different perspective, many may feel they have
escaped the shotgun blast this time, but live
in fear that they will be hit by the next
round. Focus on the company’s vision, and the
strategic goals is lost, and people experience
changes to their work situation with people
missing from the value chain.
Leadership needs to be extremely visible during
this period and it must be very clear to
everyone who the leaders are. There must be a
strategic plan that gives the organization
direction and that links the vision, mission,
goals, and action plans. There needs to be a
strong focus on team development. Team members
and team structure may be changed by layoffs.
Therefore, team cohesion must be shored up, as
well as the clarifying of roles and
responsibilities. The alignment between
performance deliverables throughout the
organization is crucial at this time.
Management and employees must still have a
sense of hope for the future and a sense of
belonging. Team building will definitely help
this, as would career development explorations.
Support can also come in the form of skills
transfer in the area of empowering for
change.
Strategically Handle
Layoffs
We have definitely found that productivity
drops in organizations during and after
layoffs. The morale takes a huge hit too. The
organizational climate can take a period of up
to three years to recover. It is never wise to
underestimate the lingering impact a layoff can
have. How you lead before, during, and after a
layoff period will determine how well the
organization can weather the storm. Any actions
taken by the leaders directly reflect upon the
organization’s culture. It is also what
employees will notice as the leaders’ true
values and intent. One organization I
encountered had one of their managers handle
all the layoffs. Once completed, the leaders
turned around and gave that manager his own
layoff slip.
It was no wonder that they continued to have
huge problems in the organization; all trust
had been broken. Similarly, how people are
handled on the day that they leave also sends a
message to all remaining staff. There is a
Tswana proverb that says, “What you do
secretly, we see secretly.” We lose nothing by
handling any situation, or person, with
respect.
Layoffs must never be an end in themselves, but
rather an unavoidable means to an end. With
this in mind, you need two separate strategies;
one that focuses on your organization’s vision
and mission, and another that is a
transitioning strategy plan that focuses on the
way to best handle the layoffs and all the
ensuing changes.
Plan to effectively manage the pain of
layoffs, and the stress of handling
layoffs.
Janine Sergay
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