Do you think layoffs are strange way of dealing with cost-cutting or re-organisation?
SM A layoff is a termination of employment at the will of the employer. It may be temporary or permanent and can occur for several reasons including downsizing, changes in market conditions, or new technology.
When a company faces a short-term economic slowdown, lot of cost savings measures are available. Layoff is an unpleasant and not very well taken process to reduce cost. However, it's very easy to think 'headcount reduction' as a top-of-the list solution.
Of course, layoffs are sometimes needed to achieve the desired impact. However, there are many ways you can downsize your workforce permanently or for a short period of time to allow your business to bounce back and achieve the financial success you need.
Layoffs are one of those tasks that HR has to perform that is no fun across the board. It's stressful for HR manager, stressful for them those who are directly affected and staffs who remain after the event.
At the end of the day, it largely depends on your corporate culture as to what path you take. Just because a plan looks good on paper doesn't mean it's a good fit for your organisation. Also, if you do choose to implement any of these changes, make sure to lean on your legal counsel to ensure everything you are doing is compliant with local, state, and federal laws.
What is the biggest challenge in conducting layoffs?
Are there alternatives to layoffs? Can organisations think of some creative ways to downsize without letting the employees lose their jobs?
SM There are various alternatives against layoffs, like - cut temporary staff, offer voluntary retirement packages, eliminate overtime, cut expensive/unnecessary perks, freeze salaries, delay raises, freeze hiring, raise employee contributions to benefit plans, reduce work hours (for hourly paid employees), implement work furloughs (with or without incentives), reduce business travel, postpone or eliminate bonuses.
Creative ways to downsize :
- Freezing salary : Temporary freezing of salary or little reduction of it, however, people prefers reduction of salary than loosing job permanently.
- Offer voluntary retirement packages : Downsizing employees without much of financial difficulties to the employees.
- Reduce the cost of training; You can cut training costs by bringing in temporary employees who already have the skills and experience you need.
- Freeze hiring : No further recruitment for the time being, it helps to maintain the employee cost constant.
Whose call is it anyway? Does HR have a say in the layoff process?
SM This is as decided by the higher management, communicated through the representatives of HR. HR is only supposed to execute the same as a facilitator.
Though the initial downsizing announcement comes from the top management, however, HR needs to implement the same and is supposed to keep employees informed. HR has the responsibility to explain the reasons and the effects of restructuring and keep the higher management up to date on progress. While terminating an employee, HR must ensure that the employees' immediate reporting head delivers the news in person and in a appropriate manner. HR must also ensure that the employees being separated are given proper respect before leaving the organisation and paid their dues on time.
As an HR manager - what has been the most difficult decision that you have ever made in a layoff process?
SM It was one of my most difficult situations I had ever faced in my HR career. We had recruited a middle level manager for one of our filling station in Bengal. He had been posted in a remote place with his family and doing reasonably good. The person was working with a good organisation with respect and honour. He had accepted the offer for independent charge and obviously for better pay package.
However, suddenly within a very short period of time from the time of his appointment into the organisation, some decision had been taken by the higher management for downsizing and restructuring the organisation and accordingly, I had been informed to communicate him for his separation from the organisation. I was completely shattered, absolutely no clue how to communicate the same to him as I had given lots of hope and rosy picture about his carrier and the status of the organisation while recruiting him. The young person was living with his family and his small kid of hardly 5-6 years of age.
One fine morning I travelled to the place where he was posted with his direct reporting head and eventually communicated the most unwanted news. It was not a very pleasant moment, though communicated very gracefully and professionally.
This was one of the most difficult situations I had ever come across in my long 33-34 years of professional life.
What is the role of HR in meeting employee expectations - of those who are being asked to go and of those who remains but may lose faith in the organisation?
SM HR being the spokesperson from both the ends is supposed to play a very neutral and vital role. Layoffs is not a pleasant situation; hence, implementation is undoubtedly difficult. However, HR is only to implement the same with lot of cautions and grace.
HR has to ensure that the employees are intimated properly and with due respect.
Full and final settlements with the benefits if any to be cleared on immediate basis. If possible, provide them some relevant training which may help them to start something on their own and at the same time get enough confidence to go-ahead in life.
HR has to play a very sensitive role towards the employees, who are retained after downsizing the organisation. Employees become demoralized and demotivated, they naturally start losing confidence upon the organisation and start looking for a change as per their convenience. They cannot concentrate on their jobs, which may eventually cause a serious downfall of the organisational growth.
Being the HR personnel, it's the responsibility to keep motivated the remaining employees and make them understand the positive side of the layoffs. How it would help the organisation to grow further! What are the future strategies of the organisation and how it would help the organisation to grow and at the same time add value to their immediate carrier growth.
Take them for various motivational training and team building sessions. If possible may be take them for some out bound training to come out from the confined situation. It may help them to get rid of frustrations, anxiety and help them to rebuild their confidence level high.
Do you think a dreaded thing like layoff can be dealt with positivity or optimism?
SM Everything has its own positive and negative both sides. Now, how you see it and from which angle depends. Termination can make someone upset immediately as the person was not ready to face the situation, however, it gives a new hope to the person and he tries to improve himself than before.
The best thing to remember is that everything happens for a reason, those reasons may not be clear at that point of time but that doesn't mean they don't exist. The person laid off has to remain optimistic and start thinking positively. A layoff could mean a new and exciting opportunity waiting right around the bend. Sometimes one door closes and another open. Someone with the right attitude can find opportunities in the midst of a crisis. The rewards may be even greater than before.