Nearly every sector and organization has been affected in some way by the current economic crisis.  Difficult decisions must be made to stay in business and remain fiscally viable.  Most difficult are the decisions that affect people’s lives, such as layoffs – particularly when the decisions aren’t about the person or their performance, but rather about the hard financial realities.  Yet within this current crisis there is unique opportunity to strengthen your organization.

It has been said that long after a person forgets what you said, they will remember how you made them feel.  And, never under estimate the impact of a former employee.  This is particularly true when dismissing or laying off employees.  One of the most important yet neglected aspects of layoffs is how the person is treated in the process.  Is their dignity maintained?  Has their contribution to the company been appreciated?  Are they approached in a manner that honors their personality and values?  Experts agree that one of the marks of a healthy and successful organization is the number of people who return to work for that organization in the future.  Our advice for organizations facing cutbacks is to be intentional and compassionate about how your employees are let go.  It will pay dividends in the future.

Another opportunity is with those who remain.  These employees will experience a range of emotions including survivor guilt, feeling overwhelmed with the addition of responsibilities, and fear that they may be the next to go.

A study of downsizing and turnover rates in 200 different companies, published in the April/May 2009 Academy of Management Journal, uncovered some startling statistics. Companies that reduced their workforce by just 0.5 percent saw more than five times that many employees chose to leave on their own.  The most likely to quit were top performers.  From surveying over 4,000 workplace survivors, the study also found that:

• 87% say they are less likely to recommend their organization as a good place to work.
• 64% say the productivity of their colleagues has declined.
• 81% say the service customers receive has declined.
• 77% say they see more errors and mistakes being made.
• 61% say they believe their company’s future prospects are worse.

Following cutbacks might be one of the best times to invest in team development, communication training, and conflict management.  Careful and targeted investment in your downsized workforce achieves several important outcomes.  First, it sends the message that your employees are valuable assets.  Second, it acknowledges that increased demands require new skills for relating to one another, increased support, and efficient team alignment.  Third, it fosters hope and loyalty at a time when employees may be questioning the organization’s commitment to its people or mission.

By investing now, you are preparing for the future as well.  When the economy turns around your employees will be more productive, more loyal, and more aligned than the competition.  They will be less likely to seek greener pastures if they have been treated well during the tough times.  And, you will have a better chance of recruiting former qualified employees while you grow.

When researching team and staff development programs, beware of high-octane, quick fixes, and resist the temptation to focus only on immediate return on investment.  While attractive in times of crisis, these are mostly illusions and do not build resilient and productive organizational cultures in the long run.

When times are tough, difficult decisions must be made.  In the midst of this turmoil are opportunities to preserve the dignity of those you let go and invest in those who stay.  The return on investment is significant and enduring.

Next Element offers a complete range of PCM seminars, training and coaching to help people effectively inspire all personality types.  To learn more about our services please call us at 316-283-4200, or e-mail michele@next-element.com.