We recently read an article in Northern Nevada Business Weekly entitled “Pink Slip.” The discussion was about the slowing economy bringing busy times to employment attorneys due to discrimination complaints against employers by laid off workers.
How can you as an employer, lessen, or possibly eliminate this type of complaint? One answer is to use a professional outplacement firm. These firms usually provide consulting services in many management areas, but we will focus on the outplacement process for the purposes of this article.
How does an outplacement consultant work? First, the consultant will work with the client up front, for no additional fee, in helping you plan the layoff/termination process. The consultant will review the demographics of your layoff list, or the background of an individual (if only one person is being terminated), to see if there is a strong potential for a discrimination complaint. If there is, you will be advised to discuss this with your labor attorney.
Also discussed will be the timing of your announcement to the individuals involved in the termination, as well as when and how to announce this cutback to the rest of your staff. This upfront communication planning is essential to helping assure a smooth process with minimal disruption to your workforce productivity.
Outplacement firms have abundant data on severance packages as well as being experts in counseling the terminated employee in moving forward. It is recommended that you provide some type of severance pay along with professional counseling on career transition, resume preparation, researching prospective employers, networking and much more.
You might ask, “Why pay severance or outplacement fees when we are laying off people to cut costs?” That is a good question and the answer may not be intuitively obvious.
First, in exchange for severance and career counseling, the employees must sign a release in which they agree not to sue the employer in return for these benefits. Eliminating one lawsuit, even if you win it, will save you thousands of dollars in legal fees.
Second, you help the terminating employee to focus on the future rather than to dwell on the past with bitterness. Keep in mind that this person will vent his or her feelings to people around them, be they other employees, customers, future customers, future employees, etc. It is far better to have goodwill ambassadors in the community rather than naysayers tearing down your reputation.
Third, and often forgotten, is the impact on the remaining staff at your firm. These people are watching carefully, often fearfully, how their former co-workers are being treated by the company. Even though you may have well- known business reasons for the layoff, throwing employees coldly out onto the street with no safety net will be perceived very negatively. This usually prompts your remaining employees to put together their own resumes and to secretly start a job search for a less fearful and more secure environment. Even if you don’t see a mass exodus, you will experience “water cooler” talk about what is going on and who is next. This in itself can destroy productivity.
What if you are not planning a layoff, but have an individual who has been with you for awhile but no longer seems to be a good fit? The same principles as mentioned above apply here. An outplacement consulting firm can work with you on providing a humane solution to this all-too-frequent problem. Many employers let this situation persist for years because they feel it is too expensive to provide counseling and severance, or they are not sure how to handle this situation. Remember, you are doing a disservice to both your company and the individual involved by letting this unhealthy environment persist.
My personal experience when working as human resources director or vice president in different companies is to have a number of the people who have been “outplaced,” return for a visit or make a phone call thanking me for helping them move forward. Probably 90 percent of these people were miserable in the old job, but did not know how to get out of it (we all need that paycheck). Once they were provided with appropriate career training and helped to move forward, they become happier and develop a more productive and meaningful lifestyle.
In running a successful business, employee exit strategies are as much a part of business as the hiring strategy on the front end and the ongoing employee development expense when running your business. Remember that people, your biggest asset, if not managed professionally can become your biggest liability.
Jack Eastwick has his own management consulting business, Expert System Consultants in Reno, and is also a senior consultant affiliated with Lee Hecht Harrison, a global outplacement consulting firm. Contact him at 786.3378 or email@example.com.
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