Communication the key for less damaging layoffs

When 24-year old Michelle decided to leave her job at an e-purchasing company last year, it wasn’t just for a career change. She suspected that if she didn’t go on her own, she would end up the same as many of her other colleagues.

“It was a Thursday morning and people were called into their managers’ offices separately,” she said about the day she started looking for another job. “As they were called in, the rest of the company was told there were layoffs happening and that people would be coming to their desks to get their stuff and that they would be really upset. We were told not to talk to them and just to let them go.”

Michelle, who didn’t want her last name or her old company’s name used, was one of the lucky ones. Unlike 20 per cent of her co-workers at the e-purchasing company, she didn’t get a pink slip. However, after seeing what happened to her co-workers when the company started to lose money, she decided not to stay for long.

“They (the employees) were told to go home immediately and they got one week’s salary and they kept their stock options,” said Michelle, who found work three days later as a learning and development analyst. “It’s like we were in mourning for the people and for the loss, and it was like they were telling us ‘Let’s not speak of that day again.'”

What Michelle describes is exactly what a struggling company shouldn’t do if it wants to keep skilled staff after a layoff, said Maryanne Kampouris, director of human resources and associate management at Human Resource Systems Group Ltd., which provides consulting, training and research services.

“If you have key employees, you have to tell them they are key, and if you don’t want to lose productivity, you have to let all of your employees know they are important to you,” Kampouris said as advice to companies forced to deal with layoffs.

However, what most company executives don’t realize, is that damage control during layoffs has to begin far before the announcements.

“The rumours fly,” she said. “No matter how much the management thinks no one knows, somebody always knows. You just have to see your president head into one more meeting with the doors closed and you know something is happening.”

The next thing that happens, she said, is that the most skilled and marketable employees – like Michelle – start looking for work. To prevent that, she added, executives need to communicate with staff.

“If you involve your employees all along, they have more reason to stay with you as a company,” she said.

Kampouris continued that another common sense concept is that if a company treats those leaving well, it is more likely to retain remaining employees.

“The best companies are the ones who let employees self select out, but with enough understanding of the future of the company to let the ones who want to stay know what’s going on,” she said.

The ordeal Michelle went through is exactly what Jackie Puchalski, director of human resources at Telus Mobility, wants to avoid with her company’s staffing policies.

Telus had to do some restructuring after acquiring Clearnet. Unlike Michelle’s company, Telus executives had a plan for the changes.

“We let people know that in six months or so that there position is going to be phased out,” she said, adding that the company offers a retention bonus and a severance package following layoff announcements, along with the opportunity for employees to find work within other departments.

“If we knew five key members were going to be moved out of a department in six months, we told them six months ahead of time,” she said. “It hurt the work environment, but we just felt people needed to know, so they could make decisions about their life. It just felt better than us knowing, but just telling them two months before the change was going to happen.”

Puchalski said after the HR department told employees about the future plans, it implemented employee assistance programs and counsellors.

Kampouris said that because the IT industry grows so quickly, human resource departments haven’t even developed policies before they have to deal with things such as layoffs.

“Where you will find government have stable HR departments with classic practices, you find the IT industry have a lot more innovative ones,” she said. “Sometimes they have creative things that happen, sometimes they have bigger mistakes.”