| Handle with care | ||
| A consequence of the current uncertainty and credit crisis may be that you as a manager will look to trim your organisation to meet a period of lower demand. Laying off people can be a matter of survival for your company. However, when doing so, there are several reasons to tread carefully. As headhunters, our primary role is naturally to be involved in the process of hiring new and perhaps additional employees. However, we often see the effects of good and bad restructuring processes as well. In a global organisation, it is important to realise that laying off people is at least as difficult as hiring new ones, because a poorly managed process will affect your company adversely – both in the short and long run. Short-term concerns The first short-term concern to anybody managing a restructuring process is to observe the relevant local labour legislation, under which the employees work, and which varies greatly from country to country. Getting it wrong could result in you being forced to pay costly and counterproductive compensation packages. Moreover, it is also extremely important that your communication to the employees is both frank and to the point. Every study on productivity under notice warnings show that it declines sharply until people know whether they will be able to continue in the job or whether they should go looking elsewhere. Regardless, it is only fair that people affected are in the know as soon as possible. Certainty is key. Long-term concerns In the long run, it is important that you as a manager are aware that people remember. In most industrialised countries, there is still a shortage of well-qualified people despite the current crisis, and when the market conditions return to normal, your future success could very well depend on how you treat people today. We all know of companies in which management used a restructuring process to display resoluteness in times of crisis to the outside world. Moreover, the management group may even have been restructured so that the new management could be tough and size down without being compassionate in the process. It is not to dilute the fact that firing people often is a matter of life and death for the company. However, most people do have an understanding if realities are harsh. It is when management keep people in prolonged uncertainty, play people out against each other in a ‘survival game’, use inappropriate timing (Christmas or other national holidays) or is seen to thrive and prosper from other people’s misfortunes that you not only hurt the people directly affected, but also your own company. As a result, some companies have later discovered that their actions had a flipside. Firstly, the employees who survived the harsh round of notices, will later know that the only way they can secure themselves is to look out for themselves. They owe no loyalty to their workplace, and if they get a better or even a similar offer elsewhere, they are off. Perhaps even more damaging, rumours of harsh and perceived unfair management spread – both mouth-to-mouth and on the net. Try to Google the name of a company, in which management has been accused of unfairness when firing people. Any search results will be dominated by news stories and blog entries about the unfairness of the layoff. In turn, it will trigger many potential employees to think twice before accepting a position within this company. Do the necessary – not the unnecessary The real value of the company rests with its key employees. So if the financial situation of your company makes it necessary to lay off people, you should as a responsible manager naturally do so, but remember that you will hopefully have to expand again at a later point in time. Therefore, you do not want people to have reservations about connecting with your company, because of unnecessary side effects caused by your management style. | ||
| Date | 11-11-2008 | |||