Manage Through Layoffs
By Cheryl Stein
Monster Business Coach
Layoffs leave lasting scars in many different places. The people that you let go feel terrible having been betrayed by a company that they trusted. These people don’t generally speak that highly of you after they are gone.
Your remaining work force feels shell shocked wondering if they will be the next to go. They also worry that their work load will increase dramatically while their compensation will not.
Your customers worry if you will be able to fulfill your commitments to them and begin to question if it is right to be doing business with you.
Your competitors start getting a vulture mentality, thinking that maybe they can exploit your vulnerability and take over your key accounts.
While there is no question that sometimes layoffs are necessary and companies have to do what they have to do to save their businesses, layoffs should not be taken lightly, especially if recovery is on the horizon.
In Daniel Rigby’ s article "Look Before You Lay Off," (HBR onpoint collection, Doing Layoffs Right) he questions the knee jerk reaction that most companies have when things aren’t going so well during times of economic uncertainty. Most companies will convince themselves that layoffs are a necessary evil during economic downturns, but he explains that the negative impact from such a move can be felt far beyond the confines of your organization because shareholders and investors will shy away from your stock, thinking that you don’t know how to manage your company.
With more Canadian companies than ever resorting to massive layoffs, companies need to take steps to reduce the negative consequences that are a result of taking this kind of action. There is absolutely no way to totally control the damage from downsizing, but there are things that companies can do to make it a little better.
Management Tip 1: Be honest and Transparent
No matter how well you think you are hiding things, people in your organization are picking up on signals that you are sending that tell them the truth.
Not all communication is verbal. In fact, we are telling people lots of things with our body language, our mood and our reactions. If things are not going well, and no one is talking about what is going on, I can guarantee that the tension in the organization allows everyone who works there to read the situation like an open book.
This tension heightens fear of the unknown and fear causes a reduction in productivity. Fear also triggers the use of default survival mechanisms that can wreak havoc on the climate and culture. When people feel afraid, they are far more likely to hog the spotlight, take all the credit, blame others, or resort to other negative and insidious behaviors that harm the workplace.
To get the best out of your employees in difficult times, share as much as you can with the people who work for you. When you share your own sense of vulnerability people will gain respect for you and will be far more likely to try their best for you.
When people are included, they feel a sense of belonging to the organization. When people feel like they belong, they want to pitch in when times get tough. They see themselves as part of the solution and not part of the problem.
Management Tip 2: Emphasize Respect
Promoting a culture of respect is one of your greatest safeguards against organizational trauma in a climate of layoffs. When we get caught up in the fear of a company that is underperforming, we tend to forget that our people are one of our greatest assets. This is the time to reassess how you are showing your workforce the respect that they deserve for carrying on without the back up that they desperately need.
Even before all this downsizing, most companies had workers who were overburdened and struggling to meet deadlines and demands. This has only gotten worse and there is not much that can be done about it. The only thing that you have in your arsenal to counterbalance the difficulty, is to let people know how much you respect what they are doing and how much you appreciate the work that they do for you.
Management Tip 3: Do it in one shot
Part of showing respect to your workers is the courtesy of only having one round of layoffs. Take the time to do strategic planning and forecast exactly how much you will need to reduce your head count to weather the storm. The people who are left can regroup and deal with the trauma if layoffs happen once but if people go to work every day and wonder if they will be next, you will be getting the worst of them and doing the worst to them.
Management Tip 4: Outplacement With a Heart
Shop around for an outplacement company that really cares about the welfare of the people that they are working with. All too often outplacement is used to alleviate our own sense of guilt from letting so many people go. If your primary focus is helping the people who are being cut and not on feeling better about your decision, the outplacement work will be done properly, honestly helping with the transition process.
There is no pill that can be swallowed to alleviate the pain of layoffs and there is no arguing that they may be a necessary evil. Handling them humanely, with honesty and integrity is the only way to reduce the scarring that is ultimately inevitable in such an uncertain climate.