The art of friendly downsizing

If you have to swing the hatchet, here are some tips for softening the blow.

If you’ve ever had to downsize an employee, you know it’s an agonizing experience.

Most of us have a visceral aversion to hurting another human being, and losing one’s job almost always comes as a crushing blow.

Furthermore, from a company perspective, downsizing is risky business. Today’s stagnant economy has a way of morphing into tomorrow’s booming one … and in time, you may want to rehire the very people you’re issuing walking papers to now.

Even more important, the way a company treats released employees greatly affects the morale of those who are left. In other words, it’s time to learn the fine art of friendly downsizing.

Never, never, never burn internal or external bridges,” says Lawrence Stuenkel, senior partner of outplacement firm Lawrence & Allen and author of “From Here To There: A Self-Paced Program for Transition in Employment.” “Friendly downsizing goes beyond your company policy book. It is the small things you do that let people know you care about their well-being. Let them know you will help as much as possible in the transition phase. This helps both those leaving and staying with the company.”

Stuenkel also suggests the following:

* Don’t try to keep secrets. Employees know how many shipments are going out, if sales are dropping, if things are changing. As soon as possible, communicate with all employees that the company is facing difficulty and is evaluating methods to handle the problem. Then, decisions to downsize will come as no great surprise. Furthermore, it’s a great step toward establishing credibility.

* Get important information on paper. Before informing an employee that he or she will be separated from the company , have human resources prepare a full written explanation of benefits including profit sharing, vested pension rights, stock options, any bonus arrangements, medical insurance continuation or conversion of policies plus unused vacation days. It is crucial that you understand people are not in the right frame of mind to understand benefits during the time of separation. Be clear that this is a lot of information and they are not expected to grasp it all, but you are available to talk at any time to review it.

* Check to see how the separation will affect the person’s pension credits and other important areas. You may want to delay or restructure the terms of separation based on what you learn about how it affects long-term pension benefits. And make sure you understand how the reduction affects protected classes (people older than age 40 are an example of a protected class).

* Plan separation meetings carefully. Separation meetings should take place as early in the week as possible and early in the day. People are fresher and psychologically stronger in the morning and thus better able to absorb the impact of a termination than if they are confronted at the end of a hectic day or week.

Separation should also be done one-on-one and in a closed-door environment. Start the meeting with something like, “I would like to share with you some recent business decisions that are going to affect the company. These decisions are going to affect several individuals; one of those individuals is you.” Be certain to give the same reasons to each employee because they will compare notes.

Talks with affected employees should be kept brief. Keep all communication in monologue form and keep meetings short and simple. This is not the place for a discussion or debate. Most managers or supervisors do not effectively plan what they are going to say and, consequently, the meeting runs way too long. Shocked employees are not prepared to ask all in-depth, pertinent questions.

In fact, after the first five minutes of a separation meeting when the employee is told that he or she will no longer have a job, it is doubtful whether 90 percent of the remaining conversation is heard. To end the meeting, simply stand up. This physical action will end all communication.

* Details are important. Company property such as keys, credit cards, etc., should be collected during the separation meeting. Computer passwords should be changed immediately after the meeting.

* Understand human nature. Some individuals may be too stunned to ask questions; others may react with a plethora of questions. If you do not know the answers, don’t be afraid to say, “I don’t know. I’ll get back to you.” Avoid phrases like “I’ll see what I can do,” which may imply preferential treatment.

* Be aware that vendors can spread misinformation. Don’t forget to arrange for a transition call with vendors, who can be a source of negative rumors if not informed appropriately.

* Think about the small things that can cause unnecessary stress. Make sure separated employees have transportation home, particularly those who ride in car pools or use public transportation. To avoid potential embarrassment, suggest employees clean out their desks, with prior arrangements, in the early evening or on a Saturday.

In a professional manner, arrange for the return or the purchase of company property including laptop computers and company cars. The day of the reduction, always check to see who is out ill, on vacation, traveling on business, attending meetings with vendors or at educational seminars so that these people may be contacted and informed appropriately.

* Don’t get caught with your face in the mud. Check to see if any of the affected individuals are due to receive sales awards, service awards or other forms of recognition. You don’t want to be laying someone off the day a recognition memo is sent companywide.

* After separations have been communicated, do not issue reassuring comments to remaining employees to confirm to them that their jobs are secure. Phrases such as “There will be no more cuts,” or “All organizational changes are in place” are seldom true. When further changes are required, employees will recall these statements — and management will lose credibility.

* Don’t forget about employees who haven’t started working yet. Review outstanding offers of employment and develop a plan to reconfirm or withdraw these offers.

* The truth is always best. Even if your organization is small, be prepared for media inquiries. Local press will want to cover the reduction, and you should have a statement prepared explaining the reasons for downsizing. Appoint a high level press officer to speak in one clear voice to handle inquiries from the media. Have this person’s name disseminated to all receptionists and supervisors. A truthful and logical statement may help mitigate the negative news and keep the company’s reputation stable.

Finally, hire a good outplacement consultant to help the entire process unfold as smoothly and painlessly as possible.

“No two downsizing situations are exactly alike,” Stuenkel says. “That’s why it pays to bring in an objective third party who really knows the ropes. Besides helping your company keep everything legal, he or she can be on site to help shell-shocked, released employees begin their transition plans.

“It will help separated employees maintain some confidence and greatly increase their success in finding a new job,” he adds. “Plus, it will prove that, despite having made the difficult decision to downsize, you do have their best interests at heart. And that show of goodwill can earn the respect of ex-employees, preserve your company’s reputation and pave the way to re-establishing these valuable relationships in the future.” Information provided by Dottie DeHart Public Relations, (828) 459-9637 or [email protected]