The start-up scenario in India has taken an ugly turn. As majority of the startups in India find it increasingly difficult to raise funds, they resort to downsizing their workforce. As a result, the soon to be ex-employees are left agonized. Organizations are clearly neither being mindful of the damage they are causing to the employees they plan to cut loose nor about their brand image. “Many companies have made it a part of their organizational process, but it is done at a small scale."Chaitali Mukherjee, Managing Principal - Leadership & Talent Consulting at Korn Ferry. "Companies tend to think - when I am asking him to go, why should I invest in him - this when people are being let go due to business reasons," says Mukherjee.
So, the question is how does an employer make the process of abrupt parting-away a little less harsh for the pink slip addressees? Apart from being respectful, organizations must feel duly responsible for helping their soon-to-be ex-employees find a suitable job. Outplacement is a strategic buoyant that would help an organization’s brand image stay afloat.
Following are the intangible benefits associated with outplacement:
- Future Talent Acquisition: Candidates would not be too keen on joining an organization known to sack its employees ruthlessly. So when the time comes that a company actually needs talent, it’d be a herculean task to find someone who’d agree to be on board.
- For the sake of the remaining employees: Layoffs are known to be responsible for a colossal damage. A feeling of insecurity grips the employees who do not receive pink slips. An employer must make sure that the morale of the remaining employees doesn’t take a hit.
- Because it’s ethical: In the end it all boils down to one thing – ethics. You do not want to leave your employees vulnerable and agonized. Mr. Sunit Mehra, Managing Partner, Hunt Partners emphasizes the ethical aspect of outplacement he says, “Outplacement is a well-accepted international concept, with leading global HR firms providing the service. The service entails counseling of the outgoing employees and help with brushing up their CV and interviewing skills. Service providers also assist with making introductions to prospective employers or head-hunters, however getting the employee a job isn’t a part of the service. This being the case, the service becomes a great branding tool for the employer, who is therefore seen as much more professional and humane under what can be very difficult circumstances for a career employee. It also becomes a great retention tool for the existing employees who believe that the organization is ethical and fair to those who are being laid-off.”
Below are Mr. Sunit Mehra’s 7 tips for start-ups make the process of laying off a little honorable for their soon-to-be ex-employees:
- The contract should upfront state what will be the terms of disengagement in case the start-up runs out of funds or closes down abruptly for other reasons.
- This makes the employment process far and transparent.
- In case of start-ups, employees who join do appreciate that they are joining a higher risk venture and so their expectation are lower than someone who has worked for one organization for a large part of their career prior to being let go.
- In the event of an abrupt closure, transparent communication is very important. If the business situation is trending downwards, the employer must communicate openly with the leadership about the impending challenge and indicate to them how to share the news with their team mates.
- Employers should avoid holding a town-hall on the “last” day and informing staff that they need not come from tomorrow. The finality of such news enhances the severity of the problem and aggravates staff needlessly.
- A better way is to let go people in batches, every two weeks, and pruning down the organization in a planned manner.
- In addition, the employers can enhance the notice period from 30-60 days to 90-120 days to ease the pain.
It’s a no-brainer that as companies in India compete each other for talent, an organization cannot afford to lose out on prospective employees if only because of earning an ill-repute for laying off a part of their workforce. No organization wants to be known as a company that hires and fires its employees. So, it is clear that a strategic approach to laying off such as outplacement must be adopted.