Many people who have been laid off from their jobs have experienced some startling contrasts. One person described the experience as follows: “It was the most humiliating and demeaning experience of my life. I was notified by e-mail. Then security arrived at my door and escorted me from the building. I have nothing nice to say about the company, and you can be assured that I will do everything in my power to let everyone know what a heartless, deceitful company it is. I pray with all my strength that it will go under soon. This couldn’t happen to a nicer company, could it?”
Contrast this with the reflection of a fiftysomething leaving one of America’s most admired companies. “Sure, I would have liked to stay, but the company was going through an awful time. I cannot complain about the way I was treated. Management was very clear in reminding me how valued I am, and they acknowledged the contribution I had made to the company over the years. They also keep me in the family, in the sense that we stay in touch, and I have access to the employee clubs and the credit union. Almost every month, someone from the company calls to check in and see if they can be of any help.”
Which of the two companies will be in a better position to recruit former employees once the business turns around? Of course, the second one. The biggest mistake to be made when laying off people is to act as if there will be no consequences once an employee exits. Companies often make the mistake of acting as if there is no need to be concerned with former employees once they are cut from the employee ranks. These are the companies that do not have a strategy regarding their former employees. They are focused only on those who have survived. That’s a big mistake. The way in which a company separates, lays off, or fires people will have a direct impact on future performance as a company. The company has a lot at stake in keeping the door open to separated employees:
The company’s image as a desirable employer. An image as an employer of choice or as one of America’s best companies is difficult to earn and easy to lose. Companies like Eastman Kodak, Motorola, and IBM have taken decades to earn their reputation as family-friendly employers of choice. So when they experienced the first major layoffs in their histories in recent years, they had to take careful steps to protect their reputations. Each of these companies kept the door open as a major strategy.
The company’s ability to attract employees. Would the employee laid off from the first company in the opening story accept an offer to return if there were a choice? In a turnaround companies compete for scarce talent. A bad separation experience not only poisons the waters for recruiting former employees, but the word can spread like the flu to all other candidates in the market. Companies risk their future when they make mistakes in separating people, which is why companies are so eager to do well and be included on lists such as “best companies to work for in America.” These reputations are hard to come by.
The company’s ability to retain. A botched separation speaks volumes to survivors as well. A common reaction characteristic of survivor syndrome is: “Wow. That could have been me! If they think so little of Ben, can you imagine what will happen to me when it’s my turn?” In fact many managers will not have to worry about additional rounds of layoffs because people will seek to leave as soon as word about the layoffs gets out.
The company’s culture. Nastiness can be contagious. It can infect a culture quickly, destroy morale, and lead to precipitous drops in productivity. It becomes a vicious circle that creates a self-fulfilling prophecy. The very positive values the company cultivated such as an optimistic outlook, high energy levels, and risk taking are driven away by anger, resentment, protective behavior, passive aggression, poor quality, and an “I don’t give a damn” attitude among survivors. The result can be further declines in productivity and profits, more rounds of layoffs, and ultimately, the demise of the organization.
Key Strategies for Keeping the Door Open. A smart company establishes a comprehensive strategy for keeping its door open. The experience of savvy companies dictates that four components make up this strategy. They consist of steps any company can and should take when separating employees, to maximize the future ability to attract and retain key talent.
Treat people with honesty and dignity. All companies are tempted to avoid difficult conversations and tough situations. But when they do, they may inadvertently be dishonest in their dealings with others and actually demean people. Hiding behind an e-mail and having security officers escort an employee past coworkers do not cut it. Employees deserve honesty and at least an explanation regarding the circumstances behind the separation. They deserve an honest assessment of their future with no false promises. They deserve dignity, an opportunity to finish what they have been doing and to talk with co-workers, if they choose.
Provide furloughs. Companies that are heavily invested in human capital have adopted furloughs as a strategy to keep open the door. Most furloughs maintain close connections with separated employees. It is much more intimate than a call back list. Managers keep monthly contact with the furloughed employee. Many furlough policies call for first refusal being granted as new positions and opportunities develop. A furlough sends a strong message: We care about you and want you back as soon as the opportunity exists.
Offer assistance on separation. Separation packages are critical to keeping the door open. The provision of placement services, assistance with career planning, and the like demonstrates that the company cares enough to take accountability for allaying some of the pain of a layoff.
Maintain contacts with former employees. Where feasible, companies should take steps to maintain contact with those they have separated. Examples include periodic social events and other organized means to maintain contact.
Keeping the door open will not happen spontaneously. It will only work if it is a deliberate strategy undertaken as part of the broader headcount solution. It will require accountability for actions and results on the part of all members of the organization to keep in touch with former staff on an ongoing basis.