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Isn’t there a better way to handle layoffs?

Feb 20, 2012 Business Daily, Management

“Soon after Citigroup let go of 100 employees across India last month, many functional heads received an unusual brief. They were asked to scout for jobs for those who had been terminated.
Counsellors were also roped in to soften the blow and professional services firms were hired to make the career transition of the terminated employees – some of them star performers – smooth.
At this moment, Citi is not the only company trying to find jobs for the people it has let go. A few others, including Bharti Airtel and DLF, are also doing it right now or have done so in the recent past, officials at these companies said. ”

The Economic Times (February 9, 2012)

My attention was directed to an article about layoffs in India’s Economic Times, excerpted above.

Apparently, Indian firms are learning the lessons of handling layoffs well, with Citi and Airtel being amongst the standard-setters.

Layoffs are a fact of economic life. Some of the people, some of the time, will always be surplus to requirements. But many companies respond very badly to the ebb and flow of commercial fortune. As I myself wrote on this page a while back:

“…these days the ability to be ruthless when it comes to downsizing is a badge of honour, a sign of macho credentials in a CEO. And we are paying a price. What is so wrong with having the right number of employees in your organisation at a given time, you ask? Nothing at all. The problem is that we get carried away when times are good, and recruit too many; and then we get carried away at times of trouble, and sack too many. “Right-sizing” is a fluid and dishonest term, because we never know what the right size is.”

There are sound reasons for giving a damn about people we lay off. First, it is quite simply the right thing to do. Throwing someone out onto the unemployment heap should never be done casually or frivolously. It is a serious matter to interrupt a livelihood, and providing soft landings makes us bigger, not smaller, as people and as organizations.

A second reason is that humane policies when it comes to redundancies are actually good for the company itself. The Economic Times made the point thus: “HR gurus say how a company parts ways with employees will have a significant bearing on the morale of the remaining workforce and also on the company’s ability to attract talent in the future. Managing layoffs well is important for the sustainability of the ’employer brand.'”

I can’t emphasize this enough: if you are known to have a culture of ruthless layoffs, you are risking damaging the very thing that should be at the heart of your competitive advantage: your corporate culture. Few things bestow advantage to companies better than a culture that gets the best performance out of people and gets them to behave in the right ways. Frequent layoffs can cause irredeemable damage to that culture. The best organizations know this, and use redundancies as an absolute last resort.

The real cost of layoffs is often in the form of damage to the employees who stay (who know carry fear in their hearts, wondering when the same might happen to them); and in the potentially great employees who fail to join the organization, knowing it is run whimsically and ruthlessly.

These days, employment brands really matter. We should craft such brands with great care and protect them as much as we do our product brands. Your reputation as an employer is an important thing if you are to attract great people and get them to give their all to your organization. The character and essence of the employment brand is revealed most tellingly in the manner in which layoffs are conducted.

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