CUSTOMatrix™ Insights Newsletter

 

Downsizing the Right Way!

Jordan Goldrich, Associate, HR/OD Services, CUSTOMatrix, Inc.

Downsizing is a reality in today's market. The best way to approach downsizing and to remain competitive is to downsize strategically. Rather than random across the board cuts, recognize that you can better position your company over your competitors by developing a powerful downsizing strategy.

Before you downsize, ask yourself the following questions:

  • How does the economy change the competitive landscape?
  • Who will our future customers be and what must we be to capture their business?
  • What is the critical work that must be done to meet our new strategic goals?
  • What skills and competencies will we need? Not need?
  • How can we retain our critical intellectual assests (key employees)?
  • What criteria will we use to make the cuts: strategic importance of job categories and positions; skills and competencies, performance, tenure, etc.?
  • What must we do for the employees who remain to return to optimum productivity?

 How you answer these questions will allow you to make intelligent decisions regarding your downsizing and provide you with the roadmap to a successful transition. The following steps will help you to reduce the stress associated with downsizing and make for a smooth transition.

  1. Design a packet that has all pertinent information including; relevant dates, severance, healthcare continuance, 401K, ESOP, availability of outplacement assistance, how references will be handled, unemployment insurance and any other relevant information.
  2. Tell employees immediately and in a private location. Accept responsibility for the decision. Don't blame others. The management team has to support each other throughout the process.
  3. Be prepared to answer the question, "why me?" The most effective responses point to several criteria such as strategic importance of positions, decision to cut positions, skills, performance and other relevant criteria.
  4. Prepare for security during the layoff to protect people, property and data.
  5. Arrange for professional counselors to be onsite for employees who have been laid off. If you have an Employee Assistance Program, EAP counselors usually provide this service.
  6. In a large layoff, have EAP counselors conduct 1 hours sessions with small groups of 10 - 20 people. Issues covered in these sessions include: handling anger and depression, how talk about the layoff with family and friends, how to contact creditors and how to handle a job search.
  7. Have counselors available for employees who need individual attention.
  8. Arrange for professional counselors to provide debriefings for remaining employees within 48 hours of the layoff. This is a demonstration of concern by management for those employees remaining. The content of these sessions focuses on how to successfully manage the normal reactions that often interrupt productivity for employees surviving a layoff (anxiety, anger, guilt, distraction, depression). The process will surface issues management will need to know in order to quickly return the workplace to maximum productivity.
Downsizing is a stressful time for all parties involved. Planning will help to make a smooth transition.

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