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Steps for Downsizing | Downsizing HR Expertise RAI Resources

When Uber downsized by cutting over 400 tech jobs in September, many eyebrows were raised. Then just last month, the company announced it was laying off 3,500 additional employees (about 14% of its workforce) due to the COVID-19 pandemic. Sadly, the ride-sharing business is just one of many organizations forced to downsize during the coronavirus outbreak.

Downsizing is not something businesses take lightly. It often involves difficult decisions and uncomfortable conversations before, during and after the process. Whether it is the result of mergers, acquisitions, market downturns, financial constraints or some other major event, companies that find themselves having to downsize their workforces are often unsure how to do this the right way.

While many companies are aware of the legal requirements that come with downsizing, not enough employers understand the ramifications that a poor layoff process can have on their companies. Beyond regulatory compliance issues, it is important to maintain your organization’s reputation and keep the morale of your remaining employees from sinking to dangerous lows during a workforce reduction. Because of this, we offer these four critical steps when downsizing:

1. Develop a well-thought-out transition plan.

It’s impossible to have a smooth downsizing process if your whole plan is to simply see how it goes. The transition process needs to be thought out beforehand, keeping the focus on company goals and objectives. You need a detailed plan for what employees (departing and remaining) can expect from the organization. This needs to be part of the transition strategy. An important task while planning for any downsizing is to carefully analyze your talent pool. Identify key skills the company will need after the layoffs. Consider how to help remaining employees impacted by the downsizing acclimate new roles and functions as the organization moves forward. For those being let go, plan on providing access to tools and human resources assistance through the exit process. This will help everyone get through a stressful and uncertain time.

2. Work closely with your human resources team.

While this may seem obvious, it is surprising how often human resources professionals are part of the tactical transition leadership. HR professionals know the rules on communicating company changes, good or bad. This helps keep your organization compliant. HR can also help develop communication strategies for managers and leadership, and they can help oversee the entire workforce-reduction process—from putting together severance packages to defining health benefits to transferring of retirement assets. Downsizing impacts people in various stages of the employee lifecycle, which is why solid HR support is so important.

Some creative downsizing plans that HR professionals can help with include:

  • Providing early retirement options, if possible. Employees are always more willing to take early retirement if offered an attractive package. Work with HR to craft the best options possible from your company. While you may lose some top talent via these offerings, you can sometimes mitigate this issue of a sudden mass exodus by extending attractive retirement packages to kick in after contracts for specific periods of time end.
  • Ask for voluntary layoffs. You may be surprised how many individuals may volunteer. Again, be prepared to potentially lose some top talent during this part of the process. The significant upsides are that downsizing should take less time and be less stressful, and that you will likely have fewer people remaining on the payroll who would likely have been looking for another job elsewhere anyway. They would probably not be giving your organization their all at a time when you really need everyone’s best efforts.

3. Maintain open and clear communications.

Good two-way communications are a critical before, during and after a downsizing. To start with, tell all employees what the rationale is behind the layoffs. This needs to be communicated in a humane manner, with a focus on what the company is doing to ensure a successful transition, and without emphasizing the numbers. Don’t over-explain things, either, as this can often unintentionally add insult to injury. Remember that the manner in which departing employees are informed about a layoff will have an impact on the morale of the employees that remain, as well as those who are let go. So be respectful to everyone involved. It matters. Make sure those who are tasked with the actual layoff notifications are well-trained on delivering the message in a professional and sympathetic way. Providing timely electronic, written and verbal communications will also go a long way in successfully transitioning employees.

Effective ways to communicate your downsizing information include:

  • Set up a website employees can easily access for up-to-date information. Frequently asked questions (FAQs), milestone dates and contact information are just a few of the documents the web site should provide. Websites and electronic communications should not be considered a replacement for human updates, however. It is essential that employees still have access to those running the day-to-day operations for the transition, either via phone, email or in person.
  • Offer a clear and concise realignment strategy for your remaining workforce. This is critical for employee retention and goes a long way in alleviating concerns about job security, so that your team focus on being productive and moving the organization forward. This could include attractive retention packages for those employees whose roles are vital to the success of the company.

4. Provide outplacement (transition) services.

Outplacement services will help alleviate the stress and frustration of your displaced employees, by giving them assistance as they transition to new employment. It will also send a clear signal to everyone that your company takes care of its people, even when difficult decisions need to be made. This will, in turn, help maintain your company’s reputation, as well as boost the workplace mood and employee satisfaction. It can better position your employer brand for a future workforce expansion as well.

At RAI Resources, we also deliver exceptional virtual outplacement services that are tailored to meet each client’s unique needs. Contact us today to discuss your company’s situation, and to find out more about how we can help.


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