No matter what term you use (layoff, RIF, employee separations, redundancy, etc.), workforce reductions are a matter of business.
There are a number of reasons why organizations determine these events are necessary, whether that’s due to a continued loss of business and revenue, a need to transform the makeup and skillset of their workforce, or something else. For as much as we’ve seen organizations focus on HR technology investments and transformation since the pandemic, workforce reduction events are still largely handled in a manual, inefficient manner, that can put a business at risk in many ways.
But it doesn’t need to be this way.
For the same reasons that an organization invests in HR technology to enable the growth and success of their workforce, a technology-enabled approach to workforce reductions can help organizations manage them in a better way, both from a risk mitigation perspective for the organization, and from the perspective of impacted and retained employees. In this article, we’ll explore workforce reduction events through the eyes of three stakeholder groups:
- HR professionals who bear the burden of the process
- Employees who are let go
- Employees that remain
We’ll examine their perspectives on how these events are managed, the impact on the business, and ways that workforce reduction technology (aka employee separations or offboarding software) can greatly improve the process for those that matter most: employees.
HR Professionals
HR professionals are often seen as the “bad guys” when it comes to workforce reductions, even though they are almost never the driving force behind a workforce reduction. Rather, HR is typically tasked with carrying out the process. This includes coordination of feedback from employee supervisors and other stakeholders, and collaboration with Employee Relations, Legal, and other Compliance groups to ensure the process is comprehensive and done correctly. An organization may or may not have a “playbook” for how workforce reductions are managed, depending on how frequently they’ve done so in the past, and how thorough they’ve been with documenting a consistent process to follow.
“The challenges we experienced included having to manually pull together reports, severance packages, and multiple rounds of edits, reviews, and redo’s. There was nothing automated about the process that could be used to help, nor used to audit, the manual work. We went to great lengths to ensure there were no errors, including auditing paperwork to the penny for severance amounts, and to the hour for final vacation payouts.”
For most organizations, managing a workforce reduction is a highly manual process, from the collection and auditing of data and decisions to the creation and distribution of packages for impacted employees.
During all facets of this process, there is pressure to be efficient, effective, and compliant. The longer the process drags out, the more impact it has on an organization’s employee base, and the more burden it can carry financially. This creates a significant amount of extra work for the HR professionals assigned to manage this process on top of their day-to-day job. In addition, there is always an emotional impact to HR professionals, as while they may or may not know the impacted employees personally, they do know the disruption this will create in the lives of those individuals.
“We were putting together manual packets, in a conference room, for weeks for a reduction of over 1,000 employees and auditing line-by-line, penny-by-penny and hour-by-hour. It created long and tedious days for everyone, and it was emotionally draining.”
Technology can help operationalize the workforce reduction process for organizations and ensure HR professionals have an established method to get through these stressful times in the best way possible. Benefits of a technology-enabled approach include:
- Streamlined decision-making process and guidance for supervisors and other stakeholders
- Increased mitigation of compliance risks with focused reports and detailed audit history
- Automated payment calculations and generation of documents
- Reduced manual effort and errors that lead to delays, issues, and overpayments
Those Let Go
“I knew the organization had been struggling financially and we were facing a lack of sales, so I wasn’t surprised that they were doing layoffs. Sales in my department were low and so they were not going to be able to keep delivery staff.”
Many times, employees are not surprised by workforce reductions at their organization. They’ve either heard the rumors, seen prior events impact their colleagues, and understand the state of the business enough to know that times are tough.
“The company was unorganized and unable to see the financial state they were in before it was too late. There were layoffs that happened before me and after me too. I would never go back, and I wouldn’t recommend working there because I don’t think anything has changed in the way they run their business.”
Regardless of whether it’s a surprise, employees are likely (and fairly) going to be upset if they are directly impacted, as being part of a workforce reduction creates uncertainty and angst in the lives of those affected. A disorganized communication strategy only makes this worse. It is critical to provide impacted employees with clear and consistent information about their separation, including the reason they were chosen, and the options being made available to them. Utilizing workforce reduction technology can help:
- Model and enable alternative approaches to traditional layoffs, such as voluntary separation offers or furloughs
- Make the process and communication flow as straightforward and streamlined as possible
- Provide a single place for employees to access for information and resources, and provide signature on required documents
- Ensure your last interaction is as positive as possible given the circumstances
Those That Remain
The impact a workforce reduction can have on the employees who remain with the organization cannot be overstated. While the organization has made a difficult decision to let certain people go, they now need to show transparency and commitment to their remaining employees.
“It felt like the layoffs were random. There didn’t seem to be any rhyme or reason as to the people that were chosen to be let go. Some of the best and most productive employees were terminated, while others who were not as good at their jobs were retained. This also impacted the organization as there wasn’t as much talent remaining to pick up the slack.”
Employees who remain want to understand why the workforce reduction occurred, what criteria was used to determine the impacted audience, and what the plan is for the business and remaining employees moving forward. Providing clear communication to employees about why a workforce reduction occurred and what will happen next can go a long way towards maintaining a positive reputation.
“There was a definite shift in how remaining employees viewed the organization after each layoff. Most colleagues that I spoke with, me included, felt like the organization prioritized increasing the bottom line over their own employees. In turn, it felt like the loyalty employees had to the company vanished, as they began to feel that senior management thought of them as just numbers on a spreadsheet.”
Even when done in the best way possible, these events can leave employees feeling discouraged and concerned about their own future, which in turn impacts their productivity in the short term. Organizations that operationalize the process with workforce reduction technology can:
- Start with a voluntary separation offer to exercise all available options before resorting to an involuntary separation.
- Get it right the first time to reduce the likelihood of another RIF. Or, have enough visibility into the different scenarios to communicate transparently what needs to happen to avoid another reduction.
- Have confidence that decisions were made in a compliant and transparent manner.
- Spend the time saved from streamlining the process to prepare for internal communications in advance.
Summary
Workforce reduction technology can mitigate the negative impacts of layoffs for all employees: HR professionals, those impacted, and those left behind. Contact us to learn more about how Transition Manager software can transform these processes within your organization.
