How to Do Right By Employees -- and the Company -- During a Workforce Change Like the Recent Tesla Firings Whatever the reason for workforce reductions, companies must take the time to plan and employ best practices.
By Sanjay Sathe Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
Even in a relatively upbeat economy with low unemployment, mass firings and major layoffs are big news, often putting brands under an unwelcome microscope. Recently, Tesla found itself in the spotlight over a decision to let go of hundreds of employees for low performance. In response, impacted employees have made the news claiming their terminations were a result of cost-cutting measures and a thinly veiled layoff.
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Despite press coverage to the contrary, reductions in force don't always indicate a problem with the company's health. In fact, layoffs can be the result of a change in focus or restructuring of business units to reflect market changes, mergers and acquisitions, or a change in product or service offerings. Whatever the reason for workforce reductions, companies must take the time to plan and employ best practices to limit legal liability, reduce negative public sentiment and maintain a positive employer brand.
Companies looking to transition team members out of the company must consider that the employee-employer relationship is no longer finite. In an increasingly connected society, former employees may become vendors, customers, brand evangelists, recruiting references -- or even repeat employees. That's the nature of the employee relationship economy. To succeed in this context, company leaders and HR professionals must focus on taking care of three things during a workforce change: the employees who are remaining at the business, the departing employees and the company's reputation.
Taking care of the company
Mishandling a workforce change can damage a company's brand. Companies don't operate in a vacuum, so reductions in force have ripple effects throughout the community. Layoffs and firings may attract media attention, or create negative sentiment on social media and company review sites. The impact of negative news on future company success should not be taken lightly by organizations looking to release staff. No matter why employees are let go, employers need to provide those in transition with the support they need to continue to be successful, including offering suitable severance packages that contain outplacement services.
It's not enough for organizations to state communication, trust and transparency as company values; these things must be put into practice. As much as possible, employers need to openly address the financial and business state of the company with all employees, as soon as possible. Leaders who think they are hiding financial turmoil within the company are only kidding themselves. For employees within the organization, the signs are too easy to sense. Rather than focusing on the problem, when business leaders are honest about the cause of a layoff and have executed a clear communication plan, employees are more open to step up and create a solution.
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If the only remedy is to lay off employees, it's critical for leaders to make sure severance benefits, including outplacement services, are in place and the details are communicated carefully to departing employees. Employees who feel they are being taken care of are more likely to leave the company without causing damage to the brand or seeking revenge through the media or on social media channels.
Pre-planning and preparation are critical to achieving a positive outcome following a staff reduction. Cutting corners or creating shortcuts in the process leave employers open to negative consequences and long-term damage to the employer brand. How and when notifications are given may determine whether or not the company faces future legal retribution by impacted employees. To safeguard the brand and limit legal liability during a restructuring, managers should be well-prepared to deliver notices based on best practices that adhere to legal guidelines. Your outplacement services provider should provide management notification training as part of its service offerings.
Taking care of the survivors
Too often, the focus during a layoff may be solely on the transitioning employees. Business leaders often fail to recognize the impact on the surviving employees -- those who remain after the layoff. Employees who are staying with the company may experience anxiety about the company's prospects, sadness about departing colleagues and guilt for still having a job. The executive team and HR leaders can minimize the impact of the reduction in force on the remaining staff by making communication a priority. Arm your managers with information so they can communicate as much about the layoff, and the business decisions behind it, as possible.
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Get in front of remaining employee sentiment by openly talking about the decision to lay off and clearly explain the changes that they can expect. Providing resiliency training for employees who stay can help give them the tools and support they need to move past the current events and return to feeling connected and productive in their roles. Any comprehensive communication plan should include elements that will continue for at least six months following the reduction in force.
Motivate employees with a sense of purpose and attainable goals to bring back a sense of normalcy to the workplace. Mitigate the negative consequences of a layoff by striking a balance between supporting exiting employees through a career transition program and keeping employee morale high. Your outplacement provider should have programs in place to help impacted employees land new jobs quickly, as well as programs to support the HR teams, managers and remaining employees.
Taking care of departing employees
A connected society makes the world smaller, and industry peer groups even smaller. Departing employees have a future role to play in the future success of the company as they move on to work for competitors or vendors -- or make decisions as customers. Taking care of departing employees is no longer just a nice thing to do; it's critical to the future success of the company.
Regardless of how employees leave an organization, either through layoffs or firing, offering outplacement services will help preserve the employer brand and improve employee sentiment. However, if your impacted employees aren't getting value from the services you offer, you might as well not offer any services at all. Be sure career transition services are tailored to individuals, instead of group sessions and boilerplates.
Related: How to Ensure Terminations Don't Negatively Impact Remaining Team Members
When transitioning employees are focused on finding a new job and working with a team of experts who can provide an expertly written resume, coaching on best practices and hand-picked job leads, they rarely have the time or the inclination to contact the press or voice their dissatisfaction on social media.
Ensuring a successful transition -- for all stakeholders
As the world gets smaller and more connected, company cultures reverberate outside the walls of organizations. Employee sentiment matters -- and that includes current, past and future employees. So, whether a company is reducing its workforce to cut costs or making personnel changes for cause, it's crucial to help affected employees transition successfully.
Modern outplacement services designed around the employee relationship economy can be a critical success factor in a period of workforce change. By combining high-tech capabilities with high-touch services like career coaching, career transition professionals can help employees move on to a new role at another company, the flexible workforce, retirement or entrepreneurship.
Company leaders facing a significant workforce change can no longer afford to think of a reduction in force as an event that won't have lasting ripple effects. By taking care of the company brand, the remaining employees, and the departing employees leaders can take care of business and ensure a successful transition for all stakeholders.
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