layoffs, downsizing and restructuring january 2011

Layoffs, downsizing and restructuring

by Toronto Training and HR

January 2011

Contents3-4 Introduction to Toronto

Training and HR5-6 Definitions7-8 Implications of poor termination

practices9-20 Meeting details21-23 After the meeting24-25 Termination letters26-30 Downsizing31-36 Outplacement37-39 Separation and severance policies40-42 Career motivation43-44 Tackling survivor syndrome45-46 Layoffs in the US47-48 Avoiding pitfalls49-52 Case studies53-54 Conclusion and questions

Introduction

Introduction to Toronto Training and HR

• Toronto Training and HR is a specialist training and human resources consultancy headed by Timothy Holden

• 10 years in banking• 10 years in training and human resources• Freelance practitioner since 2006• The core services provided by Toronto Training and HR

are:- Training course design- Training course delivery- Reducing costs- Saving time- Improving employee engagement &

morale- Services for job seekers

Definitions

DefinitionsLAYOFFSDOWNSIZING

Implications of poor termination practices

Implications of poor termination practices

INCREASEDlegal compliance issues and litigation (time and $ saved)likelihood of sign-off on termination package (time and $ saved)NEGATIVE IMPACT ONcorporate brand (maintain $ revenue and $ saved)remaining employees (maintain $ productivity/employee)

Meeting details

Meeting details 1 of 11

LOCATIONConfidential room on-siteAway from employee’s work areaAway from manager’s officeAdditional or dual exit access


TIMEEarlier in the week is ideal (Tues/Wed)Earlier in the day is idealAvoid employee birthday or anniversary dateAvoid significant holidays


ATTENDEESDirect manager should deliver the messageHR or another manager to support the process is idealLeverage skills and experience of outplacement specialistsDefine roles and scripts ahead of time


OTHER CONSIDERATIONSWill security be an issue?Will medical conditions create a risk?Create a termination checklist for network and software access, laptops, cell phones, pass codes, voicemail, etc.


POSITIONING STATEMENTBe honest – don’t set up the meeting under false pretences“George, I’d like to have a conversation with you about your performance. Can you come see me in the ABC room?”Do not schedule meeting too far in advance


DELIVERING THE MESSAGEGet right to the pointReinforce decision is final – do not negotiateBe brief, but respectful – 2 to 3 minutesKeep the discussion in business termsMove the conversation along to a discussion of next steps –this will take longer


REACTIONS TO PREPARE FOR-SHOCK AND DENIALAllow them time to reactRepeat the message if necessaryProbe gently to ensure they understand the message

Meeting details 8 of 11REACTIONS TO PREPARE FOR-ANGER AND HOSTILITYRemain calm, keep it businessDo not argue, debate or take sidesAcknowledge their anger but bring discussion back to next steps“You can schedule a time to discuss it at a later date withxxx/me. However, my purpose today is simply tocommunicate the decision, provide the package and introduce your career transition expert”


REACTIONS TO PREPARE FOR-NEGOTIATIONAcknowledge their suggestionReinforce alternatives were considered but decision is final


REACTIONS TO PREPARE FOR-RELIEF AND ACCEPTANCEProbe gently to ensure they understand the messageReinforce next stepsInform outplacement expert and HR of “controlled” reaction


BEST PRACTICENever mention names of others affected or remainingEscort the employee out of the building – they can connect with co-workers and clean up desk at a later date (if applicable)Ensure the employee is capable of returning home – assess and offer alternatives if necessary – leverage outplacement expert

After the meeting

After the meeting 1 of 2

DELIVER THE MESSAGE TO THE SURVIVORSThey may go through similar emotionsReinforce decision and support employee(s) is receivingOutline how work will be allocated/replacedOutline how calls/emails/clients will be managedReinforce the importance of their jobs

After the meeting 2 of 2

BEST PRACTICE-BE VISIBLE AND ACCESSIBLEDemonstrate objectivity and empathyUtilize change management resources – HR, Employee Assistance Programs, team meetingsHave more senior or other managers “check-in” with remaining employees

Termination letters

Termination letters

Should be clear, concise, direct and cover the important detailsRecognition of service and contributions can be added if applicableNot required to include details/evidence of performance issues or steps taken unless for causeCreate a separate financial package

Downsizing

Downsizing 1 of 4

EFFECTS OF DOWNSIZING Job securityJob satisfactionOrganizational justiceOrganizational commitmentUnion commitment

Downsizing 2 of 4REDUCING THE IMPACT OF DOWNSIZING Do it once – identify a group if necessary and get it over with.Handle the situation with sensitivity. Have a package ready - provide employees with information regarding their benefits, eligibility for unemployment insurance, any severance payments or other information you think they will need - before they leave the meeting.Communicate – communicate – communicate.

Downsizing 3 of 4REDUCING THE IMPACT OF DOWNSIZING Prepare managers with information and a communication strategy for their role with their teams.If at all possible, offer an outplacement service to the employees being let go…this will buy you tremendous good will with them and the employees who stay. In the end you are left with those upon whom you will rely to work harder and smarter. Make sure they are your key contributors and that you work hard to keep their trust. Let them know you appreciate their hard work and communicate, communicate, communicate!

Downsizing 4 of 4NEGATIVE IMPACTS Decreased morale Reduced loyalty Productivity/Quality Loss Damage to brand Turnover Absenteeism Lawsuits Negative image Stock price decrease Loss of customers

Outplacement

Outplacement 1 of 5FACE TO FACEOne-on-one sessionsGroup sessionsPersonality and career assessments Specialized webinars, workshops and networking sessions Personal finance consultation Personal image guidanceInterview coachingGuidance on approaching organizations speculativelySmall business optionsEducation, retraining and retirement options

Outplacement 2 of 5

NON FACE TO FACEDiscounts on a number of training & development courses Business cards

Outplacement 3 of 5

ONLINECreation of a customized resumeCreation of a customized cover letterCreation or revision of social media profilesGuidance on contributing to blogs and forumsDatabase of contactsAccess to a computerized career transition tool

Outplacement 4 of 5

RECENT TRENDSKey decision criteria for choosing an outplacement providerWhich employees receive outplacement support, including global differences Factors considered when determining outplacement support Which employees get what level of support, including global differences

Outplacement 5 of 5RECENT TRENDSThe most important components of an outplacement program, including opinions of those in transition Circumstances in which outplacement support is increasedThe most important indicator of a successful outplacement partner The most important indicator of a successful downsizing Perceived differences of opinion from those inside and outside of HR

Separation and severance policies

Separation and severance policies 1 of 2

THINGS TO BEAR IN MINDConsideration of employees Compliance Protecting morale and commitment Corporate values Avoiding lawsuits Protecting brand Budget Return on investment

Separation and severance policies 2 of 2

TRENDS IN SEVERANCE POLICIESWhich employees receive severance payHow severance formulae are determinedWhich employees get what level of severance, including global differencesMinimum and maximum caps for severance pay-outs, including global differencesPay-out methods, including global differencesCircumstances in which severance amounts are increased, including global differencesOther benefits provided after separation

Career motivation

Career motivation 1 of 2

COMPONENTSCareer resilienceCareer insightCareer identity

Career motivation 2 of 2

SURVIVORS OF LAYOFFSIdentification with layoff victimsPerceived justice of the layoffPerceived planningContinuance commitmentTrust in managementJob insecurityAffective commitmentNegative mood

Tackling survivor syndrome

Tackling survivor syndrome

MASS LAYOFF STATISTICS PROGRAM1421 mass lay-off actions in the last month (50 or more employees) involving 130000 workersNational unemployment rate 8.9%Industries with the largest number of mass layoff initial claims

Lay-offs in the US

Lay-offs in the US

MASS LAYOFF STATISTICS PROGRAM1421 mass lay-off actions in the last month (50 or more employees) involving 130000 workersNational unemployment rate 8.9%Industries with the largest number of mass layoff initial claims

Avoiding pitfalls

Avoiding pitfallsDefining the pool for lay-offs incorrectlyNot offering suitable alternative employmentAbsence of a genuine lay-off situationFailure to carry out a fair selection procedureFailure to consult properly on collective lay-offsFailure to inform and consult on an individual basisFailing to consider alternatives to lay-offsNot training managers on how to carry out the exerciseNot accounting for the extra costs and resources involvedFailing to account for the wider effects of the lay-offs exercise

Case study A

Case study B

Conclusion & Questions

Conclusion

SummaryQuestions

layoffs, downsizing and restructuring january 2011

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