Your business has probably been
overstaffed for years. When we do organizational effectiveness audits, we
routinely find that organizations are 10 - 40 percent overstaffed. Once the excess
people are removed, quality, productivity and profits always go up. Clients
often don't think it is even possible to successfully reduce this number of
employees until they see it with their own eyes.
With the economy in its current
shape, smart companies are taking a hard look at their staffing. The dead
weight that was an irritation last year, may be the difference between
significant business loss and robust success in this economy. So,
what should you do?
First, figure out where EXACTLY to
cut. Your goal must be to better serve sales. What jobs, or parts of jobs, are
not doing that? Diagram your value stream (from the customer's perspective) and
work backwards. Anything that doesn't add value to the customer or isn't
absolutely needed to support line operations, should be a target for reduction.
By the way, we find that most
customers have trouble doing this analysis alone. Sensory adaptation has set in
- it is hard for them to be totally objective about the value of positions
because they get distracted by the quality of people in those positions. Adding
an objective, third party to your team for this process will make it much
easier and the results much better.
Second, plan the cut. There are
dozens of things to be considered. Do you have WARN Act responsibilities? What
legal concerns might this downsizing cause and how can they be reduced? How
will the customer be informed? How will vendors be told? What will the press be
told? How will employees who keep their job be told and helped to transition to
their new roles? What assistance (severance, employee outplacement, benefits,
unemployment, etc.) will be provided to those positions being eliminated? There
are many more questions to be answered. The value of the reduction in force is
terrifically impacted by the quality of planning that goes into it. Again, most
clients welcome help with these issues.
Third, do the cut. There is no best
way to do the reduction. Many factors should be considered. Even so, it is
almost always best to "drop all the shoes" at once. Some organizations reduce a
few positions today, a few more next week, etc. - a piecemeal approach. If this
is not communicated in advance (here are the positions impacted; here are their
last days, etc.), it causes people to always be looking over their shoulder.
Fear is a potent demotivator and main cause for post-downsizing defections from
your team.
Humanity and maintenance of the
dignity of those being laid off is the first and most important rule.
Finally, you need a "get back to
business" plan. Don't stop with just doing the downsizing and telling people
what they need to do. You must help them transition. This will require ongoing
communications for several weeks after the downsizing. The time spend in this
endeavor will quickly be paid back in terms of key staff retention, quicker
productive and quality gains.
It is never fun to lay someone off.
It is less fun to hurt an entire business full of people. Start today - get
lean but don't be mean about it.
As an aside, please provide people
with outplacement today. It is an expense but it is very quickly paid back. The
faster someone gets a job, the less unemployment you pay and the less chance
you have for legal or customer service concerns.
Rick Galbreath, SPHR, is president
of Performance Growth Partners Inc., a full service organizational improvement
firm specializing in strategic planning, conference and meeting facilitation, HR
audits, corporate outplacement services, customer service assessments, customer
service training, supervisory training, employee surveys, employee handbooks,
teambuilding programs and team training, on-call and project based HR
consulting services, outsourced HR services, employee retention programs,
performance improvement programs, executive coaching, manufacturing process and
operations improvement consulting, training and programs, safety assessments,
safety training, employee retention program, performance improvement programs,
interim executive placement, conference speaking, keynote addresses, business
turnaround consulting, healthcare consulting and a wide range of other
services. Contact PGPi at (309) 664-7741 or e-mail rick@performtogrow.com
