Don't wait until next year to announce planned redundancies
21 November 2008 11:51am
Waiting until the New Year to announce planned redundancies can have a long-lasting negative effect on employee morale and a company's brand, warns executive consultant Leslie Alderman.
Alderman, of Chandler Macleod, says the ability to notify an employee of a redundancy in a caring and professional manner has become an important skill in the repertoire of any manager.
Whether the situation arises from downsizing or a merger, takeover, corporate rationalisation or simply because the individual is out of tune with the company's objectives, "a redundancy is one of the most difficult and emotionally demanding tasks that confronts a manager. No matter how often managers are faced with this situation, it is frequently a very painful process for both them and for the employees they are terminating."
Alderman told HR Daily her clients are firmly split in two camps over whether to wait until the New Year to announce redundancies or bite the bullet sooner.
There's a sense of "how could you?" in relation to the latter, because you're ruining employees' holidays and festivities, she says. "After working in career management and career transition for years I have seen it time and time again. Managers don't want to be the bearer of bad news at this time of the year. They put it off and wait until January."
This, she says, is actually the less sensitive option.
Alderman says advice of a redundancy before Christmas is better for all concerned, because affected employees can:
cash in their annual leave, long service and have some "financial padding" during the transition;
cut back on Christmas purchases, and return large-ticket items if they have been purchased as gifts;
reduce expenses during a normally high-spend period of travel and catering for family get-togethers;
get a refund on their holiday or apply for a refund on upcoming travel plans;
not miss many employment opportunities over the Christmas/New Year break, so they can take a break without stressing as much; and
use career transition/outplacement services if the organisation sponsors a program for them.
Timing the redundancy announcement before Christmas also gives remaining employees a sense of security - "no cuts before Christmas must mean they survived", Alderman says.
Waiting until the New Year can make workers angrier, she says, and the impact on employees and the company's PR can be far more damaging. "Employees know the manager knew about this prior to the Christmas shut down."
She notes as an example a large organisation that waited until 4 January to announce its redundancies, and then faced the wrath of workers who had spent their bonuses on holidays and Christmas presents. "Had they known before Christmas they may have arranged their financial situation differently."
But time it right, she urges. Give employees time to assess their Christmas plans and decide what to do.
"A few years ago one international company advised staff on Christmas Eve. What message was the organisation sending? What message to the impacted employees and to the remaining employees? Years later, employees who had survived those cuts still talked about 'the time the company created those redundancies on Christmas Eve'.
"So be careful of the cut-off point; the damage can last for years!"
Who should do it?
The redundancy meeting is best conducted by the employee's line manager, Alderman says.
"The redundancy meeting should be carefully planned. It should not be a spur of the moment decision, nor be conducted in a haphazard manner. A script should be developed to assist the manager in delivering the same message across the board."
Remaining staff should be advised concurrently so they can be prepared when the person comes out of their meeting, she says. A script should be developed for this as well.
"Common reactions vary from shock, anger, hurt and rejection with the occasional delight. Most people during this time will react in a different way than they normally would. This is the only time when past behaviour is not an indication of future behaviour. Most of the briefs I receive about how an individual will react are in fact the opposite. Plan for the worst case and ensure all the risk issues have been addressed."
Whether the employee's reaction is explosive or silent, dealing with this situation requires experience and skill, Alderman says.
She points out that often, the manager is more nervous than the person receiving the message, and she has coached managers that were "physically ill, shaking, and had sweat pouring from their temples prior to the meeting".
"Managers feel for the individuals concerned, particularly long-serving staff, when strong relationships have been developed. These meetings are always challenging even for some of the most experienced managers."
Having an expert on the ground, guiding the process, assessing the risks and ensuring there is a smooth transition for all concerned can eliminate the more explosive issues and reactions on the day, she says.
Separation arrangements
Whether the employee works out their notice period or finishes immediately depends on a number of circumstances, but "it is usually in the best interests of both the individual and the company for a clean break to be made," Alderman says.
"A swift departure can be less painful for all concerned. It also prevents undue embarrassment on the part of colleagues. If the employee stays on, false hopes of being offered another position within the company may develop.
"To find a job without the stigma of being unemployed might sound easier, but to devote full attention and energy to an effective job search can far outweigh the apparent advantages of looking for a new job while still employed."
