In the News: Alice Waagen Featured in Ethical Human Resourcing

Headline: Ethical Human Resourcing
Article by: Scott Westcott
Publication: The Organic Home
Date: Nov. 13, 2008

Bleak jobless reports in September and October have HR departments nationwide immersed in the process of laying off employees, and trying to keep the remaining talent motivated and engaged in their work.

The nation’s unemployment rate jumped to a 14 year high of 6.5 percent as the Labor Department announced last week an additional 240,000 jobs were cut in October. The cuts pushed 2008’s total job loss beyond 1.2 million. October’s rate was the highest since March 1994, and marked the 10th straight month of payroll reductions.

“In HR, we’ve been through this before so there should be lots of lessons learned in how to handle layoffs in a humane and dignified way,” says Alice Waagen, president of Workforce Learning, an HR consultancy in Herndon, Va. “The key tenet is massive amounts of open and timely communications, both for the employees leaving and those staying.”

HR leaders should get plenty of practice to hone their skills over the next several months. Michael Gregory, an economist with BMO Capital Markets Economics told MSNBC that the ‘U.S. recession is deepening’ and that the fourth quarter of the year is getting off to a ‘particularly ugly’ start.

BE FRANK

“Employees are extremely good at reading the tea leaves,” Waagen says. “Often these decisions are handled solely in the executive suite with the phenomenal belief that no one knows what’s going on. Employees generally know something is up. And trying to play it too close to the vest is a false solution.”

Instead, Waagen suggests that HR leaders and practitioners work closely with company executives and internal and external communications partners. That team should develop an integrated communications plan that keeps employees appraised of the financial condition of the organization, and the potential job related implications.

“It pays to be extremely transparent about the logical process that led to layoffs,” Waagen says. “Most people will be hurt and angry if they are laid off, but if they understand the reason they ultimately accept it.”

There are also potential legal ramifications of not approaching the layoffs with a systematic and fact based approach. Recently, four women human resources managers at Dell Inc. filed a federal suit in San Francisco, accusing the computer company of disproportionately targeting women and workers older than 40 after it began eliminating 8,800 jobs last year. Round Rock, Texas based Dell has publicly denied the accusations.

STRATEGIC APPROACH

John Heins, senior vice president and chief HR officer at Spherion Inc., a Fort Lauderdale, Fla. based recruiting and staffing firm, has first hand experience in handling layoffs. Spherion’s industry is traditionally cyclical and the current recession ‘has a lot of companies in the same boat, cutting back to control spending,’ he says.

HR’s role needs to reach far beyond wielding the job cutting axe, Heins says. Instead, HR leaders should advocate that job reductions be viewed in the context of an overarching talent management strategy, rather than across the board cuts.

“Walk the company or department leaders through a potential restructuring to demonstrate what structure will emerge and to insure the people who remain are the most skilled and talented,” Heins says. “If your HR leader is well seated at the executive table, he or she has already been in on those discussions.”

At Spherion, Heins says the company leverages the existing talent management system, which has identified top performers as well as weak links.

“We focused on exiting those who were truly the lowest performers so it wasn’t a shock to anybody,” Heins says. “And those that remained did not lose a level of trust.”

The layoff process should be mapped out as far in advance as possible, he says, with specific HR representatives assigned to business units to help managers prepare for and execute the layoffs.

“It’s often very difficult for managers to go through this,” Heins says. “Having someone from HR there can help bring the emotion down and make sure everything is handled properly from a legal and ethical standpoint. It also gives the HR department the opportunity to establish or strengthen a link with the business unit and the employees left behind.”

SURVIVOR’S SYNDROME

And those left behind will need plenty of attention. Waagen of Workforce Learning says the layoff process rightly directs resources to those losing their jobs. However, she stresses, an equal amount of focus, or more, should be placed on remaining employees.

“What is often totally ignored is the people not let go,” Waagen says. “Hopefully you made a good business decision in keeping these people, but seeing friends walk out the door can be traumatic. They are often told to pick up more workload, and get on with it, but they are probably frightened and angry. Performance will suffer if no one addresses it.”

Waagen recalls a ‘horror story’ from a company she was once associated with. The CEO gathered employees in a room, announced the layoffs and then suggested the remaining workers ‘should just be grateful you all have a job.”

“Basically, he was encouraging the survivors to dust off their resumes because they could be next,” Waagen says. “An approach like that ends up losing people you can’t afford to lose.”

Waagen’s advice? Make sure the layoffs occur with as much openness, and dignity, as possible. Explain to the remaining workers the business case for the cuts and let them know that managers and HR reps are available to talk, and that their contributions to the organization are greatly valued.

Heins agrees, and suggests HR take the leadership role in shifting the focus back to the organization’s strategy for success.

“One of the key things an HR department can quickly [do is] shift to the recovery side of the process,” Heins says. “As quickly as you can, get employees engaged and looking forward so they can move from the negatives of the layoff to the positives of making progress as an organization.”