Voluntary redundancies dangerous, outplacement key

04 June 2009 8:51am

Employers that offer voluntary redundancies when forced to downsize are at risk of losing invaluable knowledge and experience and having their best talent turn into competition.

Challenge Consulting managing director Elizabeth Varley told HR Daily that under-performing employees are unlikely to be the ones who elect to go - particularly with job markets tight.

More confident and talented workers, on the other hand, might view a redundancy offer as the perfect opportunity to take on a new challenge and explore options elsewhere.

And long-term employees could be tempted to opt for a golden handshake and use the payout to establish their own business - possibly in a rival capacity.

When downsizing, a comprehensive, three-tiered outplacement process is key to identifying non-core positions, retaining and re-engaging high-performers, and ensuring talent and experience aren't lost, Varley says.

However, before developing and acting on an outplacement strategy, she says, alternatives to layoffs must be thoroughly explored.

Pre-outplacement consultation

"Communicating with the organisation at large is critical," Varley says.

When times are tough, employers must be as transparent as possible and be prepared to consult and workshop with staff.

Employees often have a wealth of ideas on "cost-cutting without cutting heads" and creating new revenue streams, she says, and layoffs could prove unnecessary.

If, however, downsizing appears inevitable, employees are likely to appreciate the employer's position because they will know all other avenues have been exhausted.

Employers must then determine the individuals to be "outplaced", Varley says. They should "visualise the shape" of the organisation post-downsizing, and carefully work out which employees and roles are critical for their future viability.

Individuals selected for outplacement must be immediately consulted and their grievances assessed and responded to individually.

Transition

Outplacement, Varley says, is not a euphemism for termination. "It is outboarding instead of onboarding."

A successful outplacement process, she says, hinges on providing exiting employees with physical and emotional support (or "shelter, food and love"), and with the tools for managing their futures.

"A lot of employers do this badly," she notes, "because they're embarrassed they've got to this point."

Some employers choose to ignore the issue and do nothing at all, and others are over-simplistic, providing departing workers with, for instance, a few hundred dollars to build a CV.

But employers will be judged by their remaining staff, and risk losing or alienating talent if exiting workers aren't treated well, she says.

Outplaced employees, she says, should be offered career-transitioning counselling, assistance with resume preparation, advice on the "hidden job market" and networking training.

Post-outplacement

In the post-downsizing workplace, remaining employers should be gauged for their reactions to the lay-offs and their opinions on the future of the company, Varley says.

These issues can be addressed in "team cohesion" or learning and development workshops, online surveys and team profiles, focus groups and one-on-one coaching.

The "fall-out" of downsizing, she says, must be managed on a day-to-day basis.

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