Dealing with downsizing Featured

8:00pm EDT September 25, 2008

Downsizing. Rightsizing. Restructuring. Whatever you may call it, organizational layoffs are difficult on everyone.

Planned and executed properly, downsizing can positively impact the future of an organization. But, leaders must take steps to ease the burden of the process for both the downsized staff and those who remain, or risk severing critical working relationships and morale. When management fails to build an environment where remaining workers can stay engaged and productive, in the end, downsizing can produce a number of undesired results.

“When a company has to make layoffs, it can’t overlook remaining employees,” says Alfredia Mulkey, professional recruiter, Tampa Bay WorkForce Alliance. “Job security and extra work are just a few of the concerns that surround a staff that’s been forced to shrink.”

Smart Business learned more from Mulkey about the best strategies to get through the difficult time during and after the downsizing process.

What missteps can leaders avoid making when executing on a downsizing plan?

Leaders play a crucial role in maintaining the stabilization of an organization during a downsizing of the work force. An organization is most unstable during a downsize transition. Effective leaders will focus on the new vision and direction while acknowledging and validating employee emotions. A key to leadership during this time is knowing when to focus on the hardships and when to focus on building and moving into the future.

How should a company best communicate layoffs to the staff?

Clear, consistent and compassionate communication is the key. Give employees an open and honest assessment through verbal and written communication about why the downsizing was necessary. Your candor and attention to detail at all moments will convey to your staff that the decision was not arbitrary or illegal. Outline the steps being taken to ensure the solvency of the corporation and financial stability. Informing the employees remaining in an honest and empathetic manner will give them more confidence in the longevity of their jobs and will create the buy-in needed at this crucial time. Explain the business plan and keep open lines of communication with your current employees on a weekly or even daily basis regarding the status of the company.

How can a company curb resentment among those remaining?

Downsize with dignity by outlining and communicating a consistent strategy for the layoffs. When layoffs are used repeatedly without strategy, downsizing can destroy an organization’s effectiveness. Do not let emotions play a role in the decision-making process as this will cause resentment among those remaining. Include in your strategy a plan for assisting the displaced workers. Despite the financial woes your organization may have, invest in helping the downsized employee move on. This is ethical and reasonable, but most importantly, the remaining staff will be watching for demonstrations of empathy.

Even cash-strapped organizations can still extend assistance. Provide transition assistance by partnering with your local work force development organization that can offer services related to retraining, job leads and other information about current trends in the marketplace. Compile an information package pertinent to their layoff that includes information on the expiration of benefits, COBRA coverage and unemployment compensation information. Severance packages, even short-term, can also be extended as a demonstration of appreciation for the worker’s service to the organization.

What should be communicated to managers?

Downsizing is a very personal and emotional experience for people affected by the events, including managers. They are, in many cases, the bearers of bad news and have to manage the after effects of the news on their unit. They have to redistribute work, instill morale and assure productivity. They must also demonstrate a high level of compassion or risk severing long-term working relationships with team members. Managers must balance an adequate dose of compassion, combined with optimism and direction, as essential ingredients to surviving the process.

How should managers best deal with productivity, delegation and morale issues?

It’s the managers’ challenge to re-engage the remaining work force after downsizing. Often the first casualty in a downsizing is employee morale. Motivation at this time is essential, especially when the remaining employees will often have the burden of a shift in workload or responsibilities. During the rebuilding phase, it is critical for managers to develop a fair system to redistribute work. Involve employees during this time. Identify new leaders within the team or corporation who can be mentored, which can be evidence for potential in the future.

ALFREDIA MULKEY is a professional recruiter with the Tampa Bay WorkForce Alliance. Reach her at (813) 930-7570 or