October's question was submitted by an operations executive from a former client company (manufacturing) in the Midwest.
QUESTION:
Like most companies in our industry we have gone through significant down-sizing over the past two years. We are now starting to see some signs of improvement. We have received a substantial order from one of our largest customers, which may cause us to bring back over 50% of the people we let go.
Certainly a resurgence in orders and hiring is very good news all around. However, I am concerned that people may have some hard feelings or animosity from being laid off which could effect quality and morale. I have read articles from you and others about becoming an “employer of choice.” In that vein, what do you think we should focus on as we bring people back on board?
Also, in our discussions here within the executive committee, many think that having jobs available is enough and will certainly qualify us as an employer of choice! I think that is short-sighted and that we need to do more.
What suggestions do you have?
ANSWER:
Thank you for your question. Although we were unable to connect on the phone, your subsequent emails were very helpful in gaining a better understanding of the variables influencing your situation.
As you described past actions of your company, following a couple of canceled orders from your largest customers your company quickly conducted whole-scale layoffs. As I indicated to you in our emails, we are not against RIFs as a way to reduce costs. However, we always suggest a more disciplined and analytical process than the one your company conducted.
In response to your request, here is a brief description of our methodology: We call it the Intelligent Layoff Process. Our methodology ensures that workforce reduction decisions support the strategic future of the organization and the business environment in which it operates. There are 7 key questions that impact the process:
- Where does your business come from today?
- Where will it come from in the short-, medium- and long-term?
- What resources do you need to deliver on that business?
- Where should you cut? – Regionally, Internationally?
- Who should you cut? – LIFO, highest paid, least experienced?
- What should you cut? – Divisions, products, services?
- How should you cut? - Across the board, by sales, by function?
Additionally, we typically implement the process through task teams composed of employees from across the enterprise which somewhat alleviates the tension and potential animosity that can develop from downsizing. In our experience, the layoffs are usually conducted in a reasonable manner because they are influenced by people who understand how the organization really works and how it delivers value to the customer base. They also reflect good business thinking.
We created the Intelligent Layoff Process as a result of our collective experience in the HR/OD arena, as well as our direct experience as executives of corporations that we had to downsize. Some years ago, I was appointed as a trustee for Chapter 11 Business Reorganizations by the U. S. Trustee, Department of Justice when I was a partner in a business consulting firm. So we have seen the good, the bad and the ugly in organizational restructuring - Intelligent Layoff Process is an attempt to at least mitigate the ugly!
Our suggestion, then, is to look at the way your company selected people when it reduced the workforce. You may have some mistrust and/or anger from folks who were laid off and have now been re-hired. Yes, they will surely be happy to have job! The glow of a regular paycheck will last for a few months which gives you some time to have a series of formal and informal conversations addressing the reasons for the decision to let people go. You may even need to listen to some annoyed/angry individuals, as well as some very real and very sad stories. Give them your compassionate attention. (And we suggest you not apologize.)
However, the balance of the conversations should NOT be on the past but should be focused on the future – markets, new products, ideas, measures to continue to monitor costs, etc. In a couple of recent articles , we outlined a few ideas on how to have what we call “difficult conversations” – which these surely will be!
We also outlined the value that we think can come from having discussions about the future you want to create and what you envision their role (employees) to be. This can help give people some sense of involvement and optimism.
The article “Strategic Communication and Organizational Change” may provide some useful ideas on getting to alignment across the enterprise to ensure you have everyone on board for the new challenges to achieving a modified strategic direction.
And last but not least, two issues to consider:
- Is it for re-stocking purposes only? Is inventory a dangerously low level, or do they see an up-tick in orders?
- Is this an isolated situation, or are there more signs of life in other areas of your industry?
As we discussed briefly via email, a temporary spike in business may indicate it's not yet time to re-hire full time employees, but rather you might consider bringing people back as contract workers – an arrangement you are already very skilled at managing.
All articles mentioned here are available on our website @ www.wsa-intl.com and are free of charge. As always we welcome your emails and phone calls: Please email us at Ask@wsa-intl.com or contact Beth Chartier at 781-343-4008.
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