With the dot-com crash and economic downturn, a wave of job losses has beset the IT profession. Practices regarding the announcement of staff cuts vary greatly from one organization to another, and horror stories abound. Terminated employees speak of being escorted out by security guards or learning the news by trying to log-in, only to find their system access denied.
Not surprisingly, examples of 'doing downsizing right' get far less attention. Downsizing announcements are never easy, but they do not have to be nightmares.
Organizations want to treat their departing IT employees with fairness, appreciation and respect. Unfortunately, there is no 'one size fits all' blueprint for achieving this. Whether a large group of employees is involved or just one person, conducting a dignified dismissal requires careful planning, thoughtful implementation and diligent follow-up.
The following checklists, tips and guiding principles will assist in making the announcement of staff reductions more attuned to the needs of everyone involved.
A Planning Checklist
- Make the decision carefully. The fewer times that cuts are announced and the less they are preceded by rumours, the sooner the remaining workforce will return to productivity. When making the decision to downsize, try to cut as deeply as necessary the first time and confine knowledge of the decision to as few people as possible until the set time for the announcement.
The Slow No: Avoiding The 90-day Working Notice Period
Stephen had worked for a major telecommunications firm for a total of 12 years. He clocked eight years in the 1980s, and after a short stint elsewhere, he was attracted back through a headhunter. He was a project manager, working on systems development for a major organizational change initiative that lasted three years. After the project's completion, he moved from one short-term assignment to another within the organization.
Stephen experienced a major illness during his tenure, and his need to care for his aging parents soaked up all his personal leave days. When cutbacks were announced, he was given a 90-day notice letter. He needed the benefits coverage offered by the organization and a big chunk of his stock options were close to vesting. He desperately wanted to find a job within the organization.
Jobs were scarce, but his expertise in project management and his comfort with CRM software gave him confidence that he would be successful. His boss and human resources representative also encouraged him to pursue several opportunities.
Stephen did not know that there was an unofficial black mark on his file. Nothing showed up in his performance appraisals and he had never received direct feedback about any problems; and yet, interview after interview was followed by the disappointing news that someone else had been chosen for the position.
By the time the 90 days were over, Stephen's ego was severely damaged. He had thrown so much energy into his internal search that he had not even considered preparing himself for the external marketplace. He did not understand why others who appeared to have fewer qualifications were successful when he wasn't. He felt betrayed by the organization, confused and very unclear about the value of his skills. On top of this, he was exhausted.
Stephen, like many others who have no chance of finding something within their current organization, would have been much better off if someone had the courage to tell him the truth and let him use the 90-day period on his external search. Instead, he hit the pavement in much worse shape than if he had simply been invited to leave immediately and take pay in lieu of the notice. Moreover, he was three months behind in a tightening job market.
"The Slow No" is never helpful. Organizations should only encourage employees to do an internal search when there is a very good possibility that they will succeed. Internal job seekers often feel like pariahs. As their work gets transferred to others, they cease making a contribution and colleagues avoid asking how things are going. If there is still work to be completed during the 90-day period, it is not likely to be done with enthusiasm or efficiency. Regardless of how diligent, committed and professional an employee is, it is very challenging to keep one's spirits and productivity up knowing that the final day on the job is looming.
A healthy alternative would be to give departing employees clarity about their prospects of finding something internally, and to allow them to receive pay for the 90-day period without the obligation of sticking around, trying to find something else. The employee should be told what work needs to be wrapped up by when, and exactly when their workspace is no longer available. The employee could have the option to depart immediately or at any time before the appointed date without penalty. This returns some control over what's happening back to the individual.
If there is some possibility that an internal opportunity will come up during the 90-day notice period, the departing employee could be invited to follow up on internal postings from their career transition provider's office or from home. This would keep the door open but not create false illusions.
- Seek professional advice. Legal counsel from both internal and external sources should be consulted from the outset of the planning. As well, the early engagement of a career transition or outplacement firm will provide assistance with logistics, communications and support for those who will either deliver or receive the difficult news. The advice of these professionals will ensure that the organization is doing everything possible to ease the transition for everyone involved.
- Develop a critical path document. This will not have the complexity of a major project plan, but it is essential for keeping everyone organized and tracking the numerous details that need attention to achieve a well-implemented announcement. Back up from the proposed announcement date and be sure that sufficient time is allowed for decisions on policy, composition and production of severance letters, development and review of communications, and a rehearsal of the announcement for the managers who will deliver the news.
- Construct a list of those who will exit the organization. It is imperative to have accurate and complete information before composing severance letters. For each person whose employment will be terminated, record all data on their remuneration and benefits package, their start date with the organization, any breaks in service, current title, reporting relationship, work location and schedule.
Do not overlook pertinent personal information such as the date of announcement coinciding with their birthday or a significant anniversary of employment. Consider health issues, recent changes in relationships such as a separation or a death in the immediate family, and the presence of close relatives employed by the organization. These personal factors help determine the nature of support needed at the time of the announcement.
- Establish policy and list all company property to be returned. The establishment of a policy that is administered equitably across the organization is the important factor regarding the return of company property. The return of laptops, cell phones, pagers and keys could be requested immediately while the continued availability of a car might be calculated as part of the overall severance consideration.
- Construct fair severance packages. Decide on the amount and method of severance payment. Lump sum payments or salary continuance may be offered. Calculate vacation pay owing. Contact the insurance carrier and decide how to deal with group benefits. Establish policies on payment for commissions, bonuses, car allowances or similar payments.
- Make clear decisions about when each employee's duties end. There is nothing more confusing or disconcerting to a departing employee than uncertainty about expectations for the completion of their work or their prospects for finding alternate employment within the organization. Either make a blanket decision for all departing employees or decide employee by employee what is desired and expected and communicate the decision clearly. Working through a notice period is rarely a positive experience for the employee or the organization.
- Plan the logistics of the announcement and exit in every detail. Factors that drive the logistics of the announcement and exit include work schedules and locations, the number of affected employees and whether they are being let go as a whole department or being picked out of several groups. Both group meetings and individual interviews are effective if they are planned appropriately. A career transition professional can provide appropriate guidance for these difficult and sensitive decisions.
Tip: Unless there are specific concerns regarding security, do not escort departing employees out the door. Tell them what changes have been made to their system access and exactly when they are expected to have vacated their workspace. Allow them to interact with their colleagues and pack up as they wish, as long as they are not disruptive.
Guiding Principles for Delivering the Difficult News
For group announcements, have a member of the executive present. It is important to departing employees that a senior decision-maker takes part in the announcement of a downsizing. This indicates respect and concern.
For individual interviews, the employee's boss and one other person should be present. Having two representatives of the organization deliver the news allows one person to remain with the exiting employee while the other is free to fetch the career transition counsellor, the employee's belongings if requested, or attend to any other matters that might be needed or helpful.
When delivering the news, get right to the point. Whether it is a group announcement or individual, skip the preamble and long-winded rationale and tell the audience what they must hear. If the explanation preceding the difficult news is more than two sentences in length, it's too long.
Finally, be clear about what is expected of the departing employees regarding packing up their things and exiting the workplace.
Follow-up Essentials
· Be clear about whom the departing employees should contact.
· Respond immediately to all questions. It adds insult to injury when phone calls are not returned and questions are not acknowledged in a timely way. Add resources to the task if needed, and make expedient closing of the severance transactions a priority.
· Establish a database of alumni and a method of staying in touch.
· Keep in mind that the race for talent is still on! In a short time, organizations that laid off large numbers of workers may be recruiting again. What better place to start than a list of individuals whose skills and work habits are already known?
Marge Watters is co-author of "It's Your Move: A Personal and Practical Guide to Career Transition and Job Search for Canadian Managers, Professionals and Executives", and a founding partner of Knebel Watters & Associates, a career transition firm based in Toronto. She can be reached at mwatters@knebelwatters.com.