Effective leadership doesn't just happen. You have to happen into it!

Monday, December 22, 2008

People Management During Downturns

I have written on this subject before but under the circumstances it may have more relevance now. So here I am in my favorite Starbucks (because it is ‘attached’ to a Borders) sipping my expensive coffee trying to make sense of it all. I am well cognizant of the fact that I may have to cut down on Starbucks in the new year.

If the Sunday papers are to be believed, Western Digital has confirmed that it will be shutting down it's plant in Sarawak and will lay-off its entire 1500-strong workforce there. Many other manufacturers are either scaling down production or have already begun their VSS exercise. A particular safety-box manufacturer I know has entirely stopped over-time pay. A Japanese electronics manufacturer has instituted reduced working-hours. Rumours have it that Sony will be laying-off more than 1000 workers next year if the current downturn shows no signs of easing. The list goes on.

Then of course we have the global automakers either going around asking for financial bail-out or announcing a steady stream financial warnings. Thrown into this is a financial quagmire involving scandals, malpractices and down-right idiotic decisions. It all points to a massive re-correction in the global economic system. And, there will be casualties. Who? Your average wage earners!

If you are part of your organization's HR team, life could be pretty tough. You are probably feeling that you are trapped between the devil and the deep blue sea. You are right! I hope the following tips will help you through and ease your burden a little.

The first thing all people managers have to accept is that; it is nothing personal. When your employees vent their frustrations at you, it is a cry for help. Be there. Listen to them. Show empathy. When your organization decides to ‘right-size’; it is a business decision. When entire business units are shut down; it is a necessary painful decision.

Next, don't say never.....you may end up looking like a liar. The fact is HR is not always privy to critical decision making process . Often times, HR only implements decisions made elsewhere. In the case of Western Digital for example, its local HR team was told about the plant closure by their US bosses only a few days before the news broke to the press (as was reported in the press). So, if your people do ask you whether there will be any such thing happening in your organization; say that to the best of your knowledge no such thing seems to be in the pipeline. However, it is good to be prepared as the economic down-turn is indeed upon us.

However, if you were informed and in the know that a separation scheme is in the pipe-line, you are duty bound to protect the confidentiality of the matter as per your leaders’ instructions. In this instance, you have no choice but to plead ignorance if your employees enquire about it.

Now, if your organization is currently considering certain cost-containment measures in the form of work-force downsizing, the best thing you can do is to advise your leaders that it will be prudent to engage experts in the area of career transition and work-force outplacement management. Let’s face it, announcing work-force reduction is not easy to do and managing the after-effects of such an announcement is usually beyond the skill sets of most managers and heads of department. Get help and guidance from those who have helped countless organizations manage this in a more efficient and humane manner. Don’t allow the pain and hurt which is entirely avoidable from becoming a festering wound that drags the company down for years to come.

It is your responsibility as a HR professional to pressure the management to provide all possible help and assistance to those who have been ear-marked to leave the organization. This means, they must be provided with career management and career transition services so that they are able to transit out of the organization by making informed decisions. This will engender a feel-good factor within those who are separating from the organization. More importantly, and this is the real ROI from such outplacement services; those who are going to continue to be employed in the organization will have the confidence that they are working for a responsible and caring employer. This, more than anything else will ensure the quick rebound for the organization immediately after a work-force reduction has taken place. Let me also put a caveat here that such outplacement services should be provided to ALL levels of employees. The experts in this area will advise you on how best to go about it.

If you are indeed the key contact point for employees during such an exercise, I strongly recommend that you keep your office doors (and communication lines) open. As the announcement has already been made, employees will have all sorts of questions and queries. They will hear countless stories and half-truths. They will be closely watching how the company is treating their colleagues who are separating. They may not understand the reasons for these or they may not comprehend why the company is doing what it is doing. Some of the separating employees may also plant extremely negative and destructive thoughts and fears which need to be managed professionally. You can’t do this if your doors are closed!.

Whether your organization has already announced a separation scheme or is rumored to be heading that way, the following would be fail-safe HR practices to be adhered to even if some of it sounds like things you have to do anyway; because in truth they are:

1. Show respect. Show respect for those who are leaving the organization as they have all contributed in their own ways. Show respect for people’s fears and worries. Don’t make light of your employees fears as they are genuine and needs to be addressed.
2. Go beyond work. You need to relate to separating employees as a human being. This means you have to relate to them from the perspective of a working man/woman with families to support, children to educate, ageing parents to look after and fragile egos and self confidence that needs rebuilding.
3. Don’t be too apologetic. As much as an employment separation always hurts, it is after all a strategic decision any business has the prerogative to make if the situations warrants. I have seen many times how a people friendly HR professional often crosses the boundary of being apologetic to laying the blame on the company without even realizing it!
4. This will be the best time to practice ‘management by walking around’. Take the trouble to be as near and as accessible as possible to your employees both for those who are separating and those who are staying behind. Listen to them. Respond quickly and firmly to unfounded and/or negative rumours.
5. Take the lead. I find that many HR professionals themselves withdraw into a shell of self-pity and hopelessness when a separation scheme is announced. As I said earlier, it is true that often times HR only implements decisions and is not privy to the decision making BUT that doesn’t mean that the situation is all that hopeless for a HR professional to play a meaningful role. Take charge of the people. Go to the management with questions that you are unable to answer. Identify those who need special attention or observation. Suggest ways how business discontinuity can be minimized via the right people management strategies.

Wishing you all the very best in these trying times. For those of you who know me...well you know that my lines are open 24/7.

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