Preparing for After the Layoffs
Preparing for After the Layoffs | Human Resource Executive Online
HR leaders must prepare to deal with the business problems that may result from cutting jobs. If layoffs or reorganizations are not tied to other well-planned and executed workforce-related actions and programs, the tide will not turn anytime soon.
By Steven Goldberg
Corporate layoffs as a primary response to declining revenues can cause as many business problems as they solve.
Even before the economy went into a tailspin in 2008, large-scale surveys by prestigious HR consultancies were finding that only 20 percent to 30 percent of all employees felt "actively engaged" in their jobs. Can you imagine how low those numbers are now?
As a principal HR consultant and executive spearheading workforce initiatives on three continents over the past 20-plus years, I have seen many -- if not most -- organizations continue on a downward spiral after a major layoff or corporate restructuring -- which leads to the question: "How do companies avoid or minimize the fallout from a major layoff or restructuring?"
My personal estimate is that the level of active engagement in companies these days has come down by 30 percent to 50 percent. In other words, many organizations are dealing with a situation where only one or two of 10 employees are "actively engaged in their jobs" and "very focused on driving business results."
The other eight or nine workers are somewhere between suffering the corporate version of post-traumatic stress, which can certainly incapacitate them, or coping reasonably in their own way by alternating between doing their job and thinking about their next career move.
This is not a negative reflection on the quality of the typical employee. The key words used here are "actively engaged and very focused." The vast majority of employees manage to go to work and generally do their jobs even during turbulent times; the point is that almost all employees get distracted and do not operate at their best following a layoff or layoff announcement.
Employee stress levels clearly increase due to a heightened sense of job insecurity, perhaps even survivor guilt and, of course, the added pressure to get work done with less people. This situation also produces more absenteeism, more medical problems and added costs, etc.
There are logical reasons most companies will continue on a downward spiral after a layoff or restructuring. For one thing, first and second-level line managers -- if not senior executives -- often have little experience dealing with such a destabilized and universally distracted workforce.
Even if management has been through a large-scale layoff or other source of organizational turbulence before, the layoff event is still often viewed by these experienced managers as "the necessary and difficult step needed to turn things around."
Frankly, if that step is not connected to a number of other well-planned and executed workforce-related actions and programs, the tide will not turn anytime soon.
All companies should have a handle on the way environmental factors (such as seeing co-workers laid off or the way co-workers were treated on their way out) will affect the productivity, focus and commitment of employees staying on -- particularly key employees, whose resignations would adversely impact the business in a material way.
Amid all of the travails and heartache of 2008, two realizations have emerged for HR executives that could ameliorate the above situation.
The first is a greater focus on character and personal composition; e.g., what in someone's background indicates they can still focus, be committed and perhaps even thrive during adverse and/or very uncertain business conditions?
The second is increased awareness of the practical use of data-driven predictive tools to identify information such as the key employees who might be "retention risks" under certain circumstances or the optimal pace and magnitude of headcount reductions without causing other -- often unanticipated -- serious business problems.
A phrase such as "change and adapt or cease to exist" is, of course, cliche by now, but how many organizations are thinking about the need to change their hiring practices when they do have staffing needs in this market? Or thinking about ways to use communication to rebuild trust and commitment in their employees? Or rethinking the competencies they value most? Or considering greater use of scientific or predictive tools in attempts to avoid scenarios in which only one of 10 employees is actively engaged in his or her job for many months to come?
HR leaders who have such questions on their corporate radar have a much better chance of being around to ask similar questions after their next very challenging business cycle.
Steven Goldberg
is CEO of
Imminere Inc
., a workforce transformation and post-layoff risk mitigation firm. He has been in senior HR roles for more than 20 years, including global practitioner, management consulting and solution vendor, has led strategic HR initiatives on three continents and has an MBA in HR. He is a thought leader and expert in workforce optimization and talent management, having presented his innovative ideas and insights to more than 15,000 HR professionals and other corporate executives in recent years. Steven has been published or cited in Forbes, Acquisitions Monthly (UK), Employee Benefit News and the Australia Financial Review. He is also an adviser to the Human Capital Institute on HR-M&A.
February 2, 2009 Copyright 2009© LRP Publications
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