Eliminating jobs may be unavoidable due to COVID-19, but doing it badly will damage your relationship with remaining employees
by Trini Nixon, Regional Director for Hudson’s Talent Management practice
Has Australia’s virus-induced economic recession forced your organisation to part with a percentage of its workforce? If you answered in the negative, you’re one of the lucky ones.
Some 2.7 million people lost a job or were stood down between March and April, according to the Australian Bureau of Statistics, as coronavirus restrictions brought economic activity to a screaming halt.
Around the country, thousands of organisations, both large and small, are having to impart to employees the unwelcome news that their services are no longer affordable.
Given some experts, including NAB Chief Economist Alan Oster, estimate GDP will be down by more than eight per cent for the June quarter, widespread redundancies are likely to continue through 2020, as organisations seek to cut costs every which way they can.
Risking your reputation
One area of operations where it doesn’t pay to do so is the redundancy process itself. Scrimping on outplacement services, such as career transition counselling for employees who are being let go, may give the bottom line a desperately needed boost but it can be a false saving which ends up costing the company in the longer term.
Why? Because our reputations precede us and, in the social media era, they’re on show for all to see. Organisations with strong brands, which have earned a reputation for integrity and fair dealing, will find it easier to attract and retain top talent when times improve – as they inevitably will – and they’re back in the hiring game.
Conversely, companies which are perceived to have treated shabbily those employees who were deemed suddenly surplus to requirements during the pandemic are likely to find the fact recorded for posterity.
Read more: COVID-19 & your workforce: Handling the curve balls
The digital landscape provides individuals who have work-related gripes, legitimate and otherwise, ample opportunities to dish the dirt. In addition to Facebook, LinkedIn and other networking platforms, there are company review sites like Glassdoor which allow individuals to post anonymous, ‘warts and all’ reviews of their former employers.
For better or worse, candidates now turn to these platforms when researching potential opportunities and their decision on whether to join an organisation may be swayed by what they read there. Meanwhile, word of mouth remains as powerful as it ever was. Ex-employees will inevitably tell their friends and family about the circumstances of their departure and how well or badly it was handled.
Maintaining morale
Downsizing isn’t just tough on those individuals who are let go. A major round of redundancies invariably has a negative effect right across the organisation, including on employees whose jobs are safe – for now.
Watching former colleagues and friends depart is bad for morale – doubly so if there’s a perception the company has treated them poorly or perfunctorily; showing them the door with their final pay packet and no support to take the uncertain next step.
It can also be a productivity dampener. That’s something organisations which must rely on fewer employees to keep things running can ill afford, particularly when they’re gearing up for the intensified competition which challenging economic conditions inevitably ushers in.
Read more: COVID-19: How to work at home and stay sane
Investing in the redundancy process
While it may seem an unnecessary expense at a time when cash flow has never been tighter, outplacement services which support ex-employees to regroup, retrain and reposition themselves for the next stage can minimise the risk to corporate brand and morale.
Assisting individuals who have been made redundant to transition out, identity new opportunities and move ahead positively is ethically sound and sends a message to remaining employees, and the world, that yours is an organisation that puts people ahead of profits. As enterprises and individuals navigate the challenges of the post-coronavirus economy, such a reputation is likely to stand you in excellent stead.
