As news of layoffs at major U.S. companies circulates, studies forecast the trend will continue into 2024, and its impact will be felt across all industries and at every level. Employers may utilize “downsizing” as a knee-jerk reaction to economic uncertainty, however, employees and labor costs are rarely the catalyst for an organization’s loss of revenue and poor business practices.
Conversely, employees are more likely to be the source of renewal and innovation for the organization. Optimizing your current workforce as an alternative to layoffs is one of the strategies an organization can use to reinforce culture and strengthen skills.
Optimizing work means understanding how we can be more efficient, how we can reallocate work and reassign talent, and develop our workforce with new skills in areas needed both in the short- and long term.
Keeping talent on the roster, after the painful war for talent the last few years, is a strategic move. Preparing a bench of employees who are grateful they still work at your company is a testament to a strong culture with employees being the most important part of business success.
Example: Company sales are down, but delinquency is up. Reassigning client onboarding and contract positions to collections and customer service and/or inside sales for the short term could be a great move. There are many transferable skills among these positions, and even with the time needed to train, this route is most likely quicker and less risky than bringing in new people from the outside. Additionally, these employees know your culture and you know their work ethic and level of performance.
Communication remains critical. First, reassigned employees need to understand the “why” and believe in the company and leadership.
Next is to offer a choice, where that can be an option. Giving an employee the choice of reassignment or a severance package with some time to allow them to decide empowers them. When given a choice, and people decide to stay, retention rates are higher; it always comes down to treating people with dignity and respect. People like to decide rather than feeling like this is being done to them. Choice helps with morale too, as those that feel very negative usually leave.
Downsizing is not always reactive. It may be strategically used in successful organizations, wrapped into an overall workforce plan of action. This can be an opportunity to enhance the organization’s short/long term dexterity through a well-vetted plan with a new organization design.
● Layoffs come with severance and other costs and can be a hit to the morale of the survivors, without strong communication and change management plans.
● Investing in assistance through an outplacement provider or your EAP (employee assistance program) is a nice consideration.
● Exiting is just as important as on-boarding. Treat downsized employees with respect, allowing them to maintain their dignity. Remember, most didn’t do anything unethical to be treated like criminals. When people are exited in a way that is embarrassing, they tend to get upset and angry. Angry people are the ones who talk to lawyers. Employees who feel fairly treated tend to be able to move on to other positions quicker and may even boomerang back one day.
When analyzing your organization consider the following:
1. Determine departments and functions that are strategically vital, along with fundamental employee skill sets needed to go forward.
2. Determine talent needs.
3. Analyze criteria that highlight legitimate business needs.
4. Use a “funnel” approach when you are assessing individual employees to reassign. This means evaluating employees by essential skill sets first, followed by job performance, disciplinary actions, and seniority. Make sure that you are not just plucking favorites for reassignment, or you may adversely impact a population unintentionally.
5. Transparency with your organization regarding the state of the business and impact on the workforce is critical. Adults understand business realities and treating employees as such while having an open dialogue during these transitions benefits them and your organization.
Reassigning employees can be a win-win. Thoughtful and strategic tactics versus reactive actions demonstrate strong leadership and speak volumes about culture.
Interested in learning how Crothers Consulting can support you during these tumultuous times? Contact Isabelle Brennan.