Lessons from the GFC to help you navigate your workforce decisions
History can teach invaluable lessons. As we again need to reshape our teams and are forced to reduce headcounts, it is worth reviewing what we have learnt from the past.
Organisations forced to reduce headcount due to the Covid-19 disruptions need to do so with a strategic plan in mind.
This includes a credible outplacement program, because that will not only treat outgoing staff with the respect they deserve, but help retain key employees needed to help the organisation survive, and then revive.
How good outplacement helps retain key employees
Many organisations, like your own, are under pressure due to the Covid-19 pandemic disruptions and are being forced to cut staff, possibly again.
This requires hard decisions on key people who need to be kept, and others who are to go.
Among all the decisions being made to navigate the crisis this identification of key employees is one of the most critical, because these are the people who will ensure the organisation’s survival and then the revival as the economy grows again.
As CEOs and CFOs commence their HR strategies, the experience of the Global Financial Crisis a decade ago contains some lessons which can usefully be applied today.
Looking back at the companies that survived the GFC, the majority implemented human resources strategies which balanced aggressive cost saving cuts to staff, while also keeping an eye on the key personnel needed to position the company for the recovery. The same can be said today.
Identifying the right people and keeping them motivated and productive was a critical part of this success, but implementing this was more complex than balancing a cost savings spreadsheet.
A lesson from the GFC is that the rigorous planning you are undertaking on how to retain top talent should also include plans on how to gracefully exit other employees.
And to do this effectively meant not just investing in retention of these key staff, but also in proven and effective outplacement programs which treated exiting employees with care and respect.
The reality is that the way in which people leave organisations disproportionately influences the way they view their time there.
Research and Glass Door reviews show that the experience of how the last day felt like is usually more important than all the experiences over the years with your company.
If that last day was poorly handled, with insensitive and inconsistent communication and a lack of care, then an employee’s view of the organisation can be tarnished moving forward.
Moreover, with social media, online reviews and potential negative PR, the impact will affect not only those leaving your teams, but also the people who are back at work on the Monday after the job losses were announced on the Friday.
These are the key people who have been identified as critical to the future, and yet without effective outplacement services, their morale can potentially be significantly impacted due to how their colleagues were treated.
This lack of confidence can lead to the worst possible result: that these key employees look elsewhere for work because they have lost respect for the way the organisation treats its people. Even though they are the most valued employees, they no longer feel safe.
An effective and holistic HR strategy has best practice outplacement at its core, and has programs and processes in place even in times when the organisation is not cutting large numbers of staff.
This gives everyone the confidence, no matter their employment status, that the organisation is committed to doing the right thing at every point in the employment cycle and that people are valued both on their way in, and on their way out.
Without longer term planning and a committed strategy, organisational responses to cutting headcount can be chaotic and panicked.
Managers are unprepared and ill-equipped to deliver the bad news to employees, and come across as lacking in empathy.
Many Australian businesses are now considering their future strategies and as the JobKeeper program comes to an end in September, reducing headcount is likely to be a major consideration.
Organisations which begin planning now, and invest in proven outplacement programs as part of that planning, are more likely to maintain their key people in the short term and set themselves up for success longer term.