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When Downsizing Brings Your Employees Down

March 1, 1996
Related Topics: Downsizing, Featured Article
The Dilemma:
Your company went through its second round of layoffs six months ago—dismissing 245 employees, or 6% of your work-force. As expected, you’ve started to notice a change in morale. Employees seem disinterested in the company’s 50th anniversary celebration, there has been an increase in sick days and enthusiasm about next month’s new product release has dropped off considerably.

You’ve kept up to date on this topic, and you recognize the symptoms: Your company has a bad case of survivor syndrome. You’ve come up with some ideas about a few programs you’d like to implement, but you know you’ll face a great deal of resistance from senior management. After all, the downsizing was intended to save money, not generate expenses. With all the effort being put into getting back up to speed, should you "bother" senior management with your ideas, or just encourage employees to seek help outside on their own?

Readers Respond:
You should bother senior management with your ideas. Ideally, a plan to deal with survivor syndrome should have been part of the downsizing program. Since the HR person in this situation expected the change in morale, it would have been wise to plan a little preventive medicine and follow-up care. Now that the problems must be dealt with after the fact, it will cause even lower morale if employees are expected to look outside the organization for support. If the organization believes in the benefits of strong morale, it must see the value of letting the employees know it cares and understands how they’re feeling.

There are many inexpensive ways to do this and research shows a lot of goodwill can be gained by a little effort. Even something as inexpensive and simple as lunch-time meetings to discuss the issues would make a significant difference. Often you’ll be able to find experts in these areas who will do a session in-house inexpensively. Or you may have people on your own staff who can do an excellent job of this. Even having relevant videos or books available for department managers to include in their regular staff meetings will be helpful. Getting the support of managers to incorporate simple inexpensive programs is crucial.
Karin Wills
Employee Relations Coordinator
Nordion International Inc.
Vancouver, British Columbia, Canada

I would not hesitate to bother senior management with my ideas on how to help our employees cope with the very difficult situation they have now been placed in. Any assistance we could offer subsequent to the hits that are going on around them would have to be better than the rampant rumor and innuendo that now permeates the water cooler discussions.

It’s far better to have open and frank dialogue with the remaining staff about the state of the business than to have them operate in the dark, not knowing what each new day will bring. An informed staff is a prepared staff.

In today’s society change is inevitable. As HR professionals we must be prepared to deal with the questions as they’re asked and, if needed, be able to refer employees to qualified professionals, such as the organization’s employee assistance program.
Horace C. Boyington
Employee Relations Officer
Detroit Water and Sewerage Dept.
Detroit, Michigan

The problem must be addressed in some fashion or it’ll take more time and effort to address it later when it’s inevitable. If it’s recognized that bringing the problem to senior management would be a challenge, then be prepared with a good plan. There must be a focus on the debilitating impact on the health of the company. Tie it back to the significant drivers for your company: If immediate bottom-line results are critical, then sell it on a dollar savings comparison. You need to capture the attention of senior managers with something that’s important to them. The value and cost of the morale issue would be factored into the plan. And be prepared with a back-up plan. Keep it short, keep it simple and do your homework. A good cost comparison is the expense for absent time and potential medical expenses as a result of stress. And don’t whine! Speak with confidence and authority.
Robin Noah
Crest Financial Corp.
Cerritos, California

Yes, by all means, bother senior management! If they don’t listen, at least later you can say, "I told you so."
Ronald J. Cori
Vice President of Human Resources
Healthcare Mgmt. Alternatives Inc.
Philadelphia, Pennsylvania

The decision to downsize is a last resort taken to protect the viability of the organization and its ability to provide products or services while maintaining employment for the remaining staff. After a layoff is the time to show commitment to employees.

We have significant evidence to demonstrate that survivors are under great stress. From other’s experiences and our own, we know that survivors worry about the impact of change, the loss of friends, the disruption of routine and loss of a sense of control. After the traumatic event of the layoff, senior management and all leaders need to demonstrate that the employees are valued members of the ongoing organization. This demonstration can’t be talked, it must be walked. After the downsizing is the time to implement broad-based assistance programs designed to rebuild the loyalty and sense of community damaged by the layoff. Without this type of proactive support, I would expect to see an erosion of morale and company support.
Robert Foldesi
Assistant VP Human Resources
Illinois State University
Normal, Illinois

How Would You Respond to This Dilemma?
You’re the director of HR for a company with 75 employees. So, naturally, Ted came to you to seek help with a work-life issue. Ted’s youngest child recently developed a serious health problem that requires a great deal of home care. Ted and his wife both work full-time jobs and they can’t afford to give up either of their incomes. So, Ted’s idea is to reduce his workweek to 30 hours. He’s willing to telecommute a few additional hours, but is concerned that his workload, without adjustment, will swallow up 60 hours a week as usual.

The challenge? Ted is a supervisor of seven full-time employees. He’s extremely well-respected and well-liked by his co-workers, which has led to a successful six-year career in management with your company. The trouble is you’re worried he may be setting a dangerous precedent. Telecommuting has been a popular option, but never job-sharing or working part-time. Should you find a way to work with Ted and create a schedule you can both live with? Or should you let Ted know that his job requirements can’t change based on the demands of his personal life?

Personnel Journal, March 1996, Vol. 75, No. 3, pp. 126-127.

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