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Layoffs, downsizing and restructuring January 2011


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Half day interactive open workshop in Toronto for organizations considering making layoffs in the future.

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Layoffs, downsizing and restructuring January 2011

  1. 1. Layoffs, downsizing and restructuring<br />by Toronto Training and HR <br />January 2011<br />
  2. 2. Contents<br />3-4 Introduction to Toronto Training and HR<br /> 5-6 Definitions<br /> 7-8 Implications of poor termination practices<br /> 9-20 Meeting details<br />21-23 After the meeting<br />24-25 Termination letters<br /> 26-30 Downsizing<br />31-36 Outplacement<br />37-39 Separation and severance policies<br />40-42 Career motivation<br />43-44 Tackling survivor syndrome<br />45-46 Layoffs in the US<br />47-48 Avoiding pitfalls<br />49-52 Case studies<br />53-54 Conclusion and questions<br />Page 2<br />
  3. 3. Page 3<br />Introduction<br />
  4. 4. Page 4<br />Introduction to Toronto Training and HR<br />Toronto Training and HRis a specialist training and human resources consultancy headed by Timothy Holden <br />10 years in banking<br />10 years in training and human resources<br />Freelance practitioner since 2006<br />The core services provided by Toronto Training and HR are:<br /><ul><li>Training course design
  5. 5. Training course delivery</li></ul>- Reducing costs<br /><ul><li>Saving time
  6. 6. Improving employee engagement & morale
  7. 7. Services for job seekers</li></li></ul><li>Page 5<br />Definitions<br />
  8. 8. Page 6<br />Definitions<br />LAYOFFS<br />DOWNSIZING<br />
  9. 9. Page 7<br />Implications of poor termination practices<br />
  10. 10. Page 8<br />Implications of poor termination practices<br />INCREASED<br />legal compliance issues and litigation (time and $ saved)<br />likelihood of sign-off on termination package (time and $ saved)<br />NEGATIVE IMPACT ON<br />corporate brand (maintain $ revenue and $ saved)<br />remaining employees (maintain $ productivity/employee)<br />
  11. 11. Page 9<br />Meeting details<br />
  12. 12. Page 10<br />Meeting details 1 of 11<br />LOCATION<br />Confidential room on-site<br />Away from employee’s work area<br />Away from manager’s office<br />Additional or dual exit access<br />
  13. 13. Page 11<br />Meeting details 2 of 11<br />TIME<br />Earlier in the week is ideal (Tues/Wed)<br />Earlier in the day is ideal<br />Avoid employee birthday or anniversary date<br />Avoid significant holidays<br />
  14. 14. Page 12<br />Meeting details 3 of 11<br />ATTENDEES<br />Direct manager should deliver the message<br />HR or another manager to support the process is ideal<br />Leverage skills and experience of outplacement specialists<br />Define roles and scripts ahead of time<br />
  15. 15. Page 13<br />Meeting details 4 of 11<br />OTHER CONSIDERATIONS<br />Will security be an issue?<br />Will medical conditions create a risk?<br />Create a termination checklist for network and software access, laptops, cell phones, pass codes, voicemail, etc.<br />
  16. 16. Page 14<br />Meeting details 5 of 11<br />POSITIONING STATEMENT<br />Be honest – don’t set up the meeting under false pretences<br />“George, I’d like to have a conversation with you about your performance. Can you come see me in the ABC room?”<br />Do not schedule meeting too far in advance<br />
  17. 17. Page 15<br />Meeting details 6 of 11<br />DELIVERING THE MESSAGE<br />Get right to the point<br />Reinforce decision is final – do not negotiate<br />Be brief, but respectful – 2 to 3 minutes<br />Keep the discussion in business terms<br />Move the conversation along to a discussion of next steps –this will take longer<br />
  18. 18. Page 16<br />Meeting details 7 of 11<br />REACTIONS TO PREPARE FOR-SHOCK AND DENIAL<br />Allow them time to react<br />Repeat the message if necessary<br />Probe gently to ensure they understand the message<br />
  19. 19. Page 17<br />Meeting details 8 of 11<br />REACTIONS TO PREPARE FOR-ANGER AND HOSTILITY<br />Remain calm, keep it business<br />Do not argue, debate or take sides<br />Acknowledge their anger but bring discussion back to next steps<br />“You can schedule a time to discuss it at a later date with<br />xxx/me. However, my purpose today is simply to<br />communicate the decision, provide the package and introduce your career transition expert”<br />
  20. 20. Page 18<br />Meeting details 9 of 11<br />REACTIONS TO PREPARE FOR-NEGOTIATION<br />Acknowledge their suggestion<br />Reinforce alternatives were considered but decision is final<br />
  21. 21. Page 19<br />Meeting details 10 of 11<br />REACTIONS TO PREPARE FOR-RELIEF AND ACCEPTANCE<br />Probe gently to ensure they understand the message<br />Reinforce next steps<br />Inform outplacement expert and HR of “controlled” reaction<br />
  22. 22. Page 20<br />Meeting details 11 of 11<br />BEST PRACTICE<br />Never mention names of others affected or remaining<br />Escort the employee out of the building – they can connect with co-workers and clean up desk at a later date (if applicable)<br />Ensure the employee is capable of returning home – assess and offer alternatives if necessary – leverage outplacement expert<br />
  23. 23. Page 21<br />After the meeting<br />
  24. 24. Page 22<br />After the meeting 1 of 2<br />DELIVER THE MESSAGE TO THE SURVIVORS<br />They may go through similar emotions<br />Reinforce decision and support employee(s) is receiving<br />Outline how work will be allocated/replaced<br />Outline how calls/emails/clients will be managed<br />Reinforce the importance of their jobs<br />
  25. 25. Page 23<br />After the meeting 2 of 2<br />BEST PRACTICE-BE VISIBLE AND ACCESSIBLE<br />Demonstrate objectivity and empathy<br />Utilize change management resources – HR, Employee Assistance Programs, team meetings<br />Have more senior or other managers “check-in” with remaining employees<br />
  26. 26. Page 24<br />Termination letters<br />
  27. 27. Page 25<br />Termination letters<br />Should be clear, concise, direct and cover the important details<br />Recognition of service and contributions can be added if applicable<br />Not required to include details/evidence of performance issues or steps taken unless for cause<br />Create a separate financial package<br />
  28. 28. Page 26<br />Downsizing<br />
  29. 29. Page 27<br />Downsizing 1 of 4<br />EFFECTS OF DOWNSIZING <br />Job security<br />Job satisfaction<br />Organizational justice<br />Organizational commitment<br />Union commitment<br />
  30. 30. Page 28<br />Downsizing 2 of 4<br />REDUCING THE IMPACT OF DOWNSIZING <br />Do it once – identify a group if necessary and get it over with.<br />Handle the situation with sensitivity. <br />Have a package ready - provide employees with information regarding their benefits, eligibility for unemployment insurance, any severance payments or other information you think they will need - before they leave the meeting.<br />Communicate – communicate – communicate.<br />
  31. 31. Page 29<br />Downsizing 3 of 4<br />REDUCING THE IMPACT OF DOWNSIZING <br />Prepare managers with information and a communication strategy for their role with their teams.<br />If at all possible, offer an outplacement service to the employees being let go…this will buy you tremendous good will with them and the employees who stay. <br />In the end you are left with those upon whom you will rely to work harder and smarter. Make sure they are your key contributors and that you work hard to keep their trust. Let them know you appreciate their hard work and communicate, communicate, communicate!<br />
  32. 32. Page 30<br />Downsizing 4 of 4<br />NEGATIVE IMPACTS <br />Decreased morale <br />Reduced loyalty <br />Productivity/Quality Loss <br />Damage to brand <br />Turnover <br />Absenteeism <br />Lawsuits <br />Negative image <br />Stock price decrease <br />Loss of customers <br />
  33. 33. Page 31<br />Outplacement<br />
  34. 34. Page 32<br />Outplacement 1 of 5<br />FACE TO FACE<br />One-on-one sessions<br />Group sessions<br />Personality and career assessments <br />Specialized webinars, workshops and networking sessions <br />Personal finance consultation <br />Personal image guidance<br />Interview coaching<br />Guidance on approaching organizations speculatively<br />Small business options<br />Education, retraining and retirement options<br />
  35. 35. Page 33<br />Outplacement 2 of 5<br />NON FACE TO FACE<br />Discounts on a number of training & development courses <br />Business cards <br />
  36. 36. Page 34<br />Outplacement 3 of 5<br />ONLINE<br />Creation of a customized resume<br />Creation of a customized cover letter<br />Creation or revision of social media profiles<br />Guidance on contributing to blogs and forums<br />Database of contacts<br />Access to a computerized career transition tool<br />
  37. 37. Page 35<br />Outplacement 4 of 5<br />RECENT TRENDS<br />Key decision criteria for choosing an outplacement provider<br />Which employees receive outplacement support, including global differences <br />Factors considered when determining outplacement support <br />Which employees get what level of support, including global differences <br />
  38. 38. Page 36<br />Outplacement 5 of 5<br />RECENT TRENDS<br />The most important components of an outplacement program, including opinions of those in transition <br />Circumstances in which outplacement support is increased<br />The most important indicator of a successful outplacement partner <br />The most important indicator of a successful downsizing <br />Perceived differences of opinion from those inside and outside of HR <br />
  39. 39. Page 37<br />Separation and severance policies<br />
  40. 40. Page 38<br />Separation and severance policies 1 of 2<br />THINGS TO BEAR IN MIND<br />Consideration of employees <br />Compliance <br />Protecting morale and commitment <br />Corporate values <br />Avoiding lawsuits <br />Protecting brand <br />Budget <br />Return on investment <br />
  41. 41. Page 39<br />Separation and severance policies 2 of 2<br />TRENDS IN SEVERANCE POLICIES<br />Which employees receive severance pay<br />How severance formulae are determined<br />Which employees get what level of severance, including global differences<br />Minimum and maximum caps for severance pay-outs, including global differences<br />Pay-out methods, including global differences<br />Circumstances in which severance amounts are increased, including global differences<br />Other benefits provided after separation<br />
  42. 42. Page 40<br />Career motivation<br />
  43. 43. Page 41<br />Career motivation 1 of 2<br />COMPONENTS<br />Career resilience<br />Career insight<br />Career identity<br />
  44. 44. Page 42<br />Career motivation 2 of 2<br />SURVIVORS OF LAYOFFS<br />Identification with layoff victims<br />Perceived justice of the layoff<br />Perceived planning<br />Continuance commitment<br />Trust in management<br />Job insecurity<br />Affective commitment<br />Negative mood<br />
  45. 45. Page 43<br />Tackling survivor syndrome<br />
  46. 46. Page 44<br />Tackling survivor syndrome<br />MASS LAYOFF STATISTICS PROGRAM<br />1421 mass lay-off actions in the last month (50 or more employees) involving 130000 workers<br />National unemployment rate 8.9%<br />Industries with the largest number of mass layoff initial claims<br />
  47. 47. Page 45<br />Lay-offs in the US<br />
  48. 48. Page 46<br />Lay-offs in the US<br />MASS LAYOFF STATISTICS PROGRAM<br />1421 mass lay-off actions in the last month (50 or more employees) involving 130000 workers<br />National unemployment rate 8.9%<br />Industries with the largest number of mass layoff initial claims<br />
  49. 49. Page 47<br />Avoiding pitfalls<br />
  50. 50. Page 48<br />Avoiding pitfalls<br />Defining the pool for lay-offs incorrectly<br />Not offering suitable alternative employment<br />Absence of a genuine lay-off situation<br />Failure to carry out a fair selection procedure<br />Failure to consult properly on collective lay-offs<br />Failure to inform and consult on an individual basis<br />Failing to consider alternatives to lay-offs<br />Not training managers on how to carry out the exercise<br />Not accounting for the extra costs and resources involved<br />Failing to account for the wider effects of the lay-offs exercise<br />
  51. 51. Page 49<br />Case study A<br />
  52. 52. Page 50<br />Case study A <br />
  53. 53. Page 51<br />Case study B<br />
  54. 54. Page 52<br />Case study B <br />
  55. 55. Page 53<br />Conclusion & Questions<br />
  56. 56. Page 54<br />Conclusion<br />Summary<br />Questions<br />