It’s a scenario many, if not most, HR professionals will face at some point in their career.
An HR client calls to tell me they are facing an impending company-wide downsizing and they have only two weeks to identify the employees to be released. HR works quickly and diligently in concert with department leaders to identify employees, organize resources, and finalize logistics.
All in all, they manage the event well. However, weeks after the downsizing, I hear that a few of the released employees are being re-hired on six-month contracts.
At one organization, an important customer was threatening to walk because his account manager had just been let go. In another situation, a client organization was left paralyzed because a long-time IT employee had been downsized, even though he was the only person who could support a critical system. And yet another client had released warehouse workers only to find out that the sales department had just completed a huge sale, and there were not enough hands left to expedite the shipment.
So why should your organization care about this? The ‘fired-and-hired’ trend can have serious immediate implications on productivity and employee morale as well as long-lasting implications for an organization’s ability to engage and retain top talent.
In some situations, employees will return to their jobs, but with a much higher level of mistrust and they will often look for an opportunity to work elsewhere as soon as possible. In this scenario, there is simply no trust left in the relationship.
There can also be a profound impact on employees retained during a downsizing. Trust is a fragile commodity, and in the wake of a downsizing, many employees may be left wondering ‘why’ something happened, and whether they could be next. This can lead to a drop in both job satisfaction and engagement. In general, a downsizing is a test of an organization’s brand, both internally and externally, as employees, customers and the broader marketplace judge the outcomes.
The lesson in these real-life examples is that downsizing decisions, even the ones made on a very short deadline, can be done in a thoughtful way. It’s impossible to anticipate all situations and variables, but following these steps will help to ensure essential talent is not lost.
1. Restructure the organization
If a downsizing is inevitable, assemble a core team lead by HR to work with your department leaders. Together they will need to understand how the business needs to be restructured in order to achieve the immediate downsizing objectives as well as future business targets.
When eliminating positions, be sure to review the associated business processes. Eliminating roles, without considering who is going to do the work can result in overtaxed workers and important work not getting done or done well. Also, be sure to revise and create new job descriptions where required.
2. Identify critical positions
Once you understand how the organization needs to be restructured, you can begin identifying critical roles. These are the jobs that are essential in order for the organization to continue to operate smoothly and maintain productivity. During this phase, remember that skill sets that are difficult to train for are in high-demand so you’ll want to identify this talent and hold on to it if you can.
3. Assess your talent
Now that you have identified which roles are critical you can begin assessing your talent for those roles. This will involve the development of selection criteria, usually 5 to 8 points, which are weighted by role and can be used to evaluate all of your employees. Your selection criteria will assess for things like cultural fit, attitude, leadership competencies, technical skills, corporate knowledge, customer relationships and actual performance.
4. Identify contingencies
As part of ongoing talent management, ensure that no one employee is a bottleneck for knowledge about the business or customer relationships. Ongoing efforts need to be made to ensure there is more than one employee with the knowledge and expertise to handle key functions. This can be accomplished by cross training employees and ensuring key processes are documented.
Although these steps will help to ensure that critical talent is not lost during a downsizing, it’s preferable to apply ongoing talent management best practices, which would include an annual talent audit. That way, if a downsizing is necessary, HR will be able to take advantage of that information to effectively and efficiently plan a downsizing; a proven recipe to ensure operational continuity while greatly reducing the odds that your organization will get trapped in the “fired-and-hired-back” merry-go-round.
About the Author
Diane Cobbold is a Principal in Lee Hecht Harrison Knightsbridge’s Career Solutions Practice. Diane has over 20 years of experience working with HR teams to develop career solutions that support departing and retained employees to realize their career goals through traditional programs and virtual resources.Follow on Twitter More Content by Diane Cobbold