Quite often the separation of a company from its employees is accompanied by the filing of complaints and claims against the employer. Can tough downsizing programs be avoided and the event made more acceptable to workers?
Are there ways employers can use civilized reduction methods to reduce litigation risks? It turns out there is.
Reduction without harm to health
What is the threat to the company of mass layoffs of employees? First, trouble with the unions. Secondly, lawsuits and legal proceedings, complications in relations with the executive authorities, nervous conditions at the enterprise, loss of loyalty, etc. Staff cuts always have negative consequences that may take a long time to affect and which cannot always be foreseen. This is the loss of customer loyalty, and the loss of a decent image, and the movement of employees against the organization that fired them. Therefore, if there is a need for layoffs, they should be carried out in an effort to alleviate the fate of the laid-off employees as much as possible.
When downsizing, the rule is “last in, first out”. Those employees who have worked in the organization for a shorter period are the first candidates for dismissal. At the same time, they usually do not think about the consequences. During the 1998 crisis, many actively developing companies began to carry out total staff layoffs.
And only a few organizations, such as Reebok, have kept people, transferring them to part-time. What happened next? When, six months or a year later, the market began to return to normal life, the companies that laid off their employees began to look for specialists, which is not so easy. As a result, firms that retained their staff recovered faster and easier, significantly outperforming competitors. In addition, the loyalty of the personnel of the companies has strengthened, which even in the crisis took care of their employees.
Usually, company owners, with the help of layoffs, solve immediate problems, and, moreover, in isolation from strategic plans. It may turn out that now the company does not need these workers, but in six months it will appear. In addition, those people who want to keep in production begin to feel precarious and often leave.
It is impossible to expect that at the enterprise where the layoffs are planned, the personnel will work even for “satisfactory” results. “Companies have come to us more than once with a question of what can be done so that people who have been told about the reduction of staff work well,” says Svetlana Symonenko, DeTech Business Development Director, PhD in Psychology. – Nothing canbe done. Absolutely. You can try to do something, but, as a rule, it is ineffective: people are disappointed, they have apathy. And the worst thing in this situation is that the first to leave are those whom they want to keep. “
If the company is going to carry out modernization associated with the layoff of workers, the first thing to do is to find out who can be the agent of change. In this case, it is necessary to involve consultants who will conduct an appropriate audit. “Recently, we were invited by the director of a large company, who intended to carry out staff reductions, and asked to test the abilities of all employees,” says Svetlana Symonenko. “With this approach, you can identify people with amazing abilities who nevertheless work in very small positions, such as operators.
This is how talented people are found, who are then tested for learning ability, readiness for change, ability to form a team, etc. It is these employees who can be conductors of new ideas and forms of work. But there are also workers who are “technology carriers” who are effective through experience, not ability. They do not have the potential for development. But getting rid of such people is the same as chopping off the branch on which you sit. You also need to hold on to these people. As a rule, these are technologists who are highly valued in the market in their sector and who are always welcomed by a competitive enterprise. “
It is imperative that the inevitability of reductions be made clear to staff. The Gallagher Liggett-Ducat company, for example, has developed a project “Rationing the number of personnel by types of production equipment”, which allows you to accurately calculate the production rates for a particular type of equipment for certain positions. If equipment operating standards are significantly underperformed, this indicates that the staff is bloated. For a manager, such a link to statistics, to specific numbers can be a good help in a conversation with employees.
Svetlana Symonenko advises to meet with every employee who has been laid off. The employer is obliged to be socially responsible for the staff. A consultant is needed who will provide vocational guidance to dismissed workers and help them find a job. Such procedures must be carried out with lower-level personnel. More qualified personnel are more likely to find a job on their own, but they also need support.
Unconventional approaches to downsizing in small companies
The retailer was about to close the shop selling souvenirs and gifts, which meant firing a number of salespeople. The store director held preliminary negotiations with them and announced two options for the possible development of events: employees could expect the planned opening of a new store in another area in a few months, or leave of their own accord.
Employees threatened to file a lawsuit and at the same time expressed a desire to fire them due to staff reductions. The company began planning a downsizing option with a two-month benefit. It was expected that the final stage of negotiations between the firm’s management and employees would go well. Due to the tense atmosphere, it was decided to create a negotiating committee consisting of the HR director, the director of the closed store and a lawyer.
The HR director, not relying on information from the store director, decided to listen to employees and their arguments about the upcoming dismissal. It turned out that the employees only wanted to receive a two-month allowance, and none of them insisted on the wording in the work record book “dismissed due to staff reductions”. Employees were given bonuses based on the results of their work in the amount corresponding to a two-month salary, and a corresponding entry was made in the work book with the wording “of their own free will.”
This option turned out to be acceptable for both the staff and the employer. The employer spent the funds in the planned amount, and the employees not only received severance pay, but also such a record of dismissal in the work book, which could not interfere with their further employment. After all, as you know, employers often perceive the wording “to cut staff” as a veiled evidence of the employee’s incompetence.
This way of downsizing is easiest in small businesses. But sometimes large companies find an opportunity to negotiate with their employees. “We have two options for solving the problem of staff reductions,” says Tatiana Shubina, HR Director of Gallagher Liggett-Ducat. – The first is to follow the legislation exactly. In this case, the procedure is extended for six months.
We must notify the employee of the upcoming dismissal two months in advance, upon termination of the contract, pay severance pay for two months, if a person does not find a job, then for the third month, if after five months he remains unemployed, we pay him the salary again. And if he did not get a job in the fifth month – and the fifth month the salary. All this is painful for both the employee and the employer. Therefore, we try to part with people by agreement of the parties. We offer a compensation package that is larger than what they are entitled to by law. “
Gallagher Liggett-Ducat offers an employee with a reduction of more than five salaries. Employees have a choice: to leave according to the standard reduction scheme or leave the company, having received significant compensation, to devote the freed up time to finding work and at the same time to exist normally. As a rule, workers choose the second path.
Downsizing in production with subsequent employment
HR directors find it most difficult to downsize in manufacturing companies, as the mentality of workers differs significantly from the mentality of the “white collar”. “90% of the personnel of the production enterprise are workers and foremen. You need to have special negotiation skills with them, ”says Elena Mayorova, HR Director at Prime Development. “It is necessary to explain in detail the objective reasons that caused the reduction, and then explain each step of the planned procedure.”
It is in production that layoffs on staff reductions are most violent: fierce resistance and unwillingness to come to terms with their new fate are classic manifestations of the mood of workers in such a situation. Sometimes it is impossible to cope with a tense situation using the above methods. To ease tensions, production managers often have to resort to various tricks.
Let’s give an example. The analytical service of the printing company calculated that if workers were transferred from a three-shift work schedule to a two-shift one, the company would receive an obvious economic benefit. It was planned to reduce the shift of 15 printers. Having issued the appropriate order, the production management tried to familiarize the employees to be laid off with it. In addition to open discontent, the production manager did not succeed in achieving anything from the workers: the workers refused to sign the order to lay off.
Neither references to the Labor Code, nor assurances that they would be paid substantial benefits, did not dispose employees to further conversation with management on this topic. The production management asked the personnel service for help. The head of the personnel service listened to the arguments of the employees and realized that the majority were afraid of not finding a job because of their age, mostly men of 45-50 years old. Everyone had a lot of practical experience, but since the advertisements for production vacancies, which the workers had time to get acquainted with, indicated strict age restrictions of up to 35-40 years, they were afraid of the prospect of being on the street.
The head of the service contacted several similar printing industries in the hope of providing patronage for the employees of the shift, which had already become “unnecessary” for their production. Having phoned about a dozen companies, he found a newly organized production, which required printers. Having assured the head of the personnel department of the new production that the workers who were laid off in their company were in fact good specialists, he arranged an interview with the personnel department.
The workers quickly found a common language with both the personnel department and the new production manager. Undoubtedly, recommendations to workers from the “old” head of the personnel service played a huge role in this whole process. At the same time, the reduction procedure was carried out in strict accordance with the conceived plan, the order was signed by all employees, the corresponding benefits were paid.
The workers started new jobs four months after the layoff, as new production had opened by that date. As you can see, everything coincided, but the chain of coincidences is not accidental. As they say, he who seeks will always find a way out of any, even difficult situation. The methods can be completely different. The main thing is that employees remain in the working order in a good mood, even if in a different company.
The market situation is constantly changing: sometimes an enterprise, forced to cut production and fire people, begins to develop rather quickly. Competently and carefully carried out downsizing leaves the employer in this case the opportunity to turn to the old proven personnel.
One of the ways to minimize losses during staff reductions is outplacement, employment of laid-off employees through consulting organizations. The outplacement scheme is usually as follows: a company pays a recruiting agency to conduct a seminar that teaches downsized employees how to look for a job, for a professionally written resume, and for the opportunity to get acquainted with vacancies registered with the agency. In this case, employment is not guaranteed. The article was prepared by the service essaycustomwriting.com/research-proposal-writing-service/