Q. What are the short and long-term effects of lay-offs?
A. In a downturn, lay-offs are inevitable. The most important thing that an organisation needs to do is to make it painless and seamless to the extent feasible. If there is a business need to re-look at the organisation, its structure and its people, then embrace the “Art of Tough Love” – Tough on issues and soft on people; that is the way to deal with issues such as downsizing. The decision to make people redundant is tough but that can be made easier by treating the people with respect. The process should be planned in such a way that the exit is as graceful as possible. Affected employees are helped in different ways like through outplacements, good compensation, recommendations, and the company invests in helping them build skills and capabilities and providing them some kind of subsidy or support. Such employees are in that situation not for their lack integrity or performance but mainly due to economic reasons.
Q. Generally, transparency is a big issue in Indian companies –especially about how they communicate on downsizing to its employees.
A. You have to keep in mind that one can’t make everyone happy, but one can try to make the process as painless as possible. When a person is told that s/he is longer required, s/he goes through what is called SARAH (Shock, Anger, Rejection, Acceptance and Help). You need to make him/her accept the decision by rationally communicating the same. Make him/her feel important and help them to find another job. Those are the testing times, where the culture of the organization and the caliber of the leadership show in the way that the process is managed.
It’s important that organisations should keep in mind is that the downsizing process should not be subjective, whimsical or discriminatory. It is imperative that the process of downsizing is well thought through, planned and executed consistently and uniformly so that people understand that even though the process was harsh, it was fair. Many organisations have made salary cuts and redundancies, but still were rated as “Best Employers” as they handled the situation very well. They were transparent, rational, open and consistent in their approach.
Q. Media, telecom, infrastructure and auto have been the hardest hit among sectors during this downturn. Do you see more downsizing happening in the future given the current economic condition?
A. There will be a lot of restructuring because of which people may lose jobs. Some people may find themselves redundant due to technological advances as they have not upgraded their skills or have outlived their utility. Others may also face the boot due to economic reasons, mergers and acquisitions or transformational change.
Q. Are HR managers equipped to deal with such IR issues?
A. Most of the HR managers are not equipped to handle dynamic and critical IR issues. They do not have the frame of mind, have not been trained and do not have the experience to deal with such issues. Most of the business schools don’t have adequate syllabi on IR and even the faculty members were not trained in the practical aspects of IR. That is a major gap in the HR skill sets. Many industrial bodies like the Employers’ Federation, FICCI, NHRDN and CII have started realising this and have come together and making HR managers aware about the issue. The focus is shifting, but much more needs to be done.