I originally wrote this back in December, but I guess I never published it. Still relevant given the ongoing carnage. As Don Dodge noted recently:
“How bad is it? At the current rate of job loss, within two months, it will be worse than The Great Depression. “
So on with the post…
Lots of folks are being introduced to the dreaded “Reduction in Force” aka legalese that makes it easier for HR to do layoffs. Unless you have the best luck in the world and an impeccable hiring record, you will have to deal with layoffs at some point in your company’s life.
But what amazes me is how badly some companies handle this. There are a ton of resources and case studies, not to mention that most companies have HR professionals who should be on top of this when it has to happen. There’s simply no excuse for doing it badly.
A very good friend of mine has just been through a layoff. The company announced that they would be downsizing about 8 weeks ago. They are still deciding who goes and who stays. Needless to say, the impact on morale has been huge. The company’s best people are actively looking for new jobs and they’ll be left with those that are either unable to get new jobs or oblivious to what is going on. Management’s indecision is placing the entire company’s future in jeopardy.
When it comes to downsizing, I’m a big fan of Jack Welch. The basic rules are (a) clear purpose, (b) quick execution and (c) deep enough cut the first time so business can go back to normal.
But inevitably, there are plenty of other suggestions on how to proceed in difficult times, and I’ve personally been through most of them. The scenarios I seen include “lets all take a pay cut”, “volunteer to go”, “you all choose who should go” and “management decides”.
“Lets all take a pay cut” doesn’t solve the problem. People won’t stomach more than a 5-10% cut, and that’s usually not enough to solve the problem.
“Volunteer to go” only works if you have a greying workforce. In a typical company, relatively few people will volunteer to quit their jobs.
“You all choose” rapidly turns into a McCarthy-istic witch hunt. It pretends that there are no politics in the workplace, which in anything other than a 1 person company, is an absurd denial of reality.
So that leaves “Management Decides”. As a responsible executive, I think anything other than “management decides” is a cop out. If you have any kind of credible organizational structure (i.e. not 100 people reporting to once person) it’s really not that hard to rank team members. It may not be fun, but as a competent manager, you know who’s a star, who’s a good worker and who’s at the bottom of the pile.
So if you are faced with layoffs, do your job and do it right. Your team deserve it.