Downsizing: Don't Retreat – Motivate!
These days with increasing frequency, companies are cutting jobs and calling the process by a variety of buzzwords, including downsizing, rightsizing, cost cutting, or streamlining. History suggests that the last term, streamlining, is perhaps the most constructive, because it implies getting down to business with a focused, pragmatic approach. Companies that prospered after the last recession were those that did so. Moreover, many did not merely weather economic hardship but also redeployed their operations in the process in order to emerge stronger.
Today’s declining economy requires a similar proactive response. Although to some extent, just lying low and waiting for the recession to pass may be valid, companies cannot postpone their search for new opportunities indefinitely. They need to respond by repurposing their own services to deliver relevant value to their customers. The ones that ignore this directive are far more likely to perish--leaving voids for their more pragmatic competitors to fill.
But—paradoxically--today’s double mandate of downsizing and repurposing means that, especially at this time of job cutbacks, the highest degree of leadership is required. Accordingly, this article will show you how to manage your staff effectively during downsizing and at the same time position your company advantageously to seize future market share.
Planning, planning, planning
Although downsizing and layoffs can be organizational lifesavers, these measures are so expensive and taxing that they must be utilized thoughtfully. Sometimes their toxic effects even cause management to make the fatal mistake of denying warning signs that a layoff is needed until it’s too late to plan for one adequately. One reason why appropriate advance planning is crucial is because it important to determine first whether the root of the problem is actually too many staff or too little profit. If a business already lacks revenue, it is inadvisable to lay off staff solely as a short-term cost-cutting measure. On the other hand, if you want to determine if your business has too many employees, you first need a clear, well defined assessment of present conditions and an equally clear vision of your business’s future. Formulating this vision requires you to review your business plan, products, and services to decide what you want to accomplish next and which future offerings are likely to be most profitable. Then decide what staff you will need to achieve your goals. Clarifying these resolutions first will not only enable you to decide which staff to cut and which to retain but will also facilitate a quicker corporate turnaround toward better efficiency and value. It matters how you treat people
Also consider carefully in advance how you will treat the people you downsize. It really matters—and not only to those who leave. It also directly affects the morale and retention of the valued, high-performing employees who remain on your staff. Additionally, it either perpetuates or kills your reputation as a company that others will want to work for (and even in these trying times, you will likely still need to hire.) So for all these reasons, you need to consider carefully beforehand such decisions as how much notice laid-off staff will receive and the contents of their severance package.
Without doubt, during downsizing you need to know and follow the prevailing laws governing employment practices. But you equally need to realize that delegating all aspects of planning to the legal department, whose primary goal is to reduce your company’s risk of litigation, will not necessarily help preserve the intellectual capital, morale, and overall effectiveness of your operation. Typically, for example, to avoid accusations of discrimination, corporate lawyers will recommend laying off a set percentage of staff across all departments on a last-hired, first-fired basis. But as outlined above, rather than following such arbitrary statistics, it would be better to base your decisions on how many and which employees to lay off on a carefully compiled strategic plan and staff’s ability to contribute to it (or not.)
Maximize communication with staff
Similarly, corporate lawyers often advise against saying anything more than is absolutely necessary either to departing employees or survivors of layoffs. Yet trust of management among surviving workers can be dramatically eroded if management withholds information that could be enormously helpful to remaining employees in planning their own lives. The resulting damage to their morale could take years to correct. Thus—ideally--managers should run the layoff process in a way that all employees feel is transparent and fair and communicate openly to them about it at all stages. Or failing that, managers should at least be honest with workers about the fact that they are deliberately withholding comment for legal reasons.
Even for companies that aren’t downsizing, outcomes are still especially critical in this challenging economy and require you to communicate with your staff like never before. Now is not the time for managers and owners to retreat but rather to escalate their own visibility and accessibility. As much as possible, all leaders – including those at the very top – must be available to answer staff’s questions.
It is also essential not to sugarcoat reality to employees. Although at all times you must do your best to reassure staff, PrintLink believes that your communications with them must still be as honest and prompt as possible– even when relaying bad news. If you neglect to perform your own immediate damage control in this way, the rumor mill will take control for you, possibly engulfing your staff in even more stress and decreased motivation than the situation actually warrants.
Employ the best managers
As stated above, managers who are capable leaders are your key assets right now, and among their prime directives must be productivity. Even before the current economic crisis, printing companies were already embracing lean manufacturing and other structured methods of improving their bottom line. But now such disciplines have become even more critical. And while your company’s productivity undeniably depends on technology, it is people who actually drive it. So along with renovating your technology, it is just as important for managers to renovate staff periodically by reviewing their job functions and descriptions, eliminating redundancies, identifying functional gaps, and training or hiring to fill them. Outsourcing your recruiting and hiring activities to specialists like PrintLink can help you secure the best possible hiring outcomes, while reserving your managers’ time and attention for other critical aspects of your operation.
Support your survivors
In a tough economy it is more important than ever to recognize that staff represent both your company’s present and future success. Therefore, besides productivity, your mandate to managers must also include building strong relationships throughout your operation and reinforcing staff’s confidence, motivation, and commitment.
In this regard, survivors of downsizing require special understanding. Research indicates that workers who keep their jobs after downsizing are almost as likely to need medical treatment for stress as those laid off. And while survivors’ attitudes and reactions to change vary as widely as do their rates of adjustment to it, many will experience emotional reactions that may hamper their work performance temporarily. So your downsizing plan needs to recognize that your remaining staff need psychological space and time, as well as the support of management, to deal with their distress before they can resume full productivity.
Therefore, another large part of managers’ post-downsizing task is to help staff feel confident of their continued value to the organization and their own capacity to grow and master the changed work environment. By adopting a motivating approach to downsizing up front, in preference to a strict mandating approach, managers can help convince survivors of the value of their continued efforts and co-operation. Initially, the goal of downsizing should not be presented to them as mere dollar savings but rather as an emotionally engaging vision for the future (securing the company’s longevity, for instance, or enabling its growth) that will encourage staff to take ownership of the changes required. Additionally, to aid recovery and fuel productivity still further, managers should set clear expectations enabling each staff member to understand specifically how he or she forms part of the company’s future.
At the same time, managers must advocate staff’s career development by identifying and providing the additional training, team building, or other resources they need to perform the new or larger jobs they are expected to fill. Now is also the time for managers to foster open dialogue and empower staff to develop processes that improve operational efficiencies. The results will not only elevate staff’s level of motivation in the short term but could also well propel your company to the position of a profit leader with the return of better economic times. And when the market finally does turn around and start demanding your offering, you’ll already have both competent staff and efficient processes in place to deliver it right away.
Recognize staff achievement
Finally, we recommend a strategic and cost-effective recognition program to keep employees focused on precisely the key activities and behaviors you require to achieve company goals. As one expert recently commented: "Employee recognition isn’t just about feeling warm and fuzzy. It may be the key to surviving the current economy. Trim costs all you want, but customers will stay away if they see sagging morale and a staff that has mentally checked out. A thriving team environment can be what sets your company apart."
Indeed, to survive and thrive beyond the current economic slump, companies need to imitate the victors who prospered after the last recession by equipping, energizing, and motivating their teams.