Dan Phelan is among the foremost thought leaders in human resources. He has held key leadership roles in several areas of GlaxoSmithKline and is a member of RiseSmart’s Strategic Advisory Council. Here he answers questions in the continuing series of articles for RiseSmart called “Ask An Expert.”
(Got a question for Dan Phelan? Ask it in the comments.)
What are some of the best practices organizations should abide by during an offboarding event?
I always think that the key to these things is transparency. I think that it’s important that any organization — whether it’s a business or hospital of whatever it is — gives the business reason for why the downsizing is taking place. I think if you treat employees like the adults that they are, people tend to get it. The business rationale is very important.
In terms of how to go about communicating, that varies from organization to organization. It makes sense to do some kind of internal email to employees and, depending on the status of the company in the community, you may want to have the external team deal with the media. Also, if you are a major employer in the region, consideration should be given to notifying the head local elected official simultaneously with notifying employees and the media. I think it’s a judgment call on whether you have to do that or not. If you’re a large enough presence, I think that’s worth doing.
Then it’s about communicating the severance terms to the affected people, includingoutplacement assistance. And providing the support they need to transition from the organization, both financial support and support in terms of getting back into the workforce. One of the most important things is how the employees still in the organization perceive how their colleagues were treated.
After the event is over it’s important to have a town hall meeting and really address the remaining employees, and to build with the workforce you have. These downsizings give everyone pause, and it’s important to reassure them.
How do you keep morale up during that?
One of the things we’ve done over the years is talk about resilience of our people and the workforce. We don’t spend a lot of time talking about work-life balance; we talk about resilience.
If you’re really communicating your strategy and people understand what’s happening — when you take these kinds of actions people don’t like it obviously — I think they get it. It’s not something we want to do, but something we have to do to keep the business growing.
I think of the analogy of a tree. Sometimes you have to prune a tree to get the tree to remain healthy. In this time when it’s very hard to grow organically with sales, sometimes unfortunately you have to focus on cost reduction. It is a challenge keeping morale up, but being honest and transparent with people is very helpful.
Does that honesty come before the layoffs occur?
If the chief executive and the top management team are communicating properly, people know what’s going on and they understand what’s driving the company strategy. So while some kind of a large downsizing may come as a surprise, if people understand where the company’s heading, it’s a lot easier to absorb.