Blog: How to effectively handle termination due to downsizing/retrenchment?

Employee Engagement

How to effectively handle termination due to downsizing/retrenchment?

The act of letting an employee go, the termination discussion due to retrenchment/downsizing would be the toughest job for an HR professional.
How to effectively handle termination due to downsizing/retrenchment?

“Anybody who ever built an empire, or changed the world, sat where you are now. And it's because they sat there that they were able to do it.”

Said Ray Bingham played by George Clooney in the movie ‘Up in the air’ while firing an employee. He plays a corporate downsizing expert in the movie.

The act of letting an employee go, the termination discussion due to retrenchment/downsizing would be the toughest job in management/human resources.

Handling employee exits is a concern for us in Indian organizations too. From the recent incident of firing an employee over the phone by an HR person from one of the leading organizations has triggered thoughts on this. As the audio and news went viral, everyone knew, the approach was wrong.

And it is going to be needed as most of our jobs are getting affected due to automation and as thousands of employees are getting laid off.

Before we go ahead with handling terminations, what was wrong with this incident? She took the wrong way to do it and approached the overall process in a hurry. We should never do it over the phone! The organization should have arranged discussions and did something towards making their transition easier or helped them with some benefits to sustain for some time. But often cost is a factor, which the lady is saying repeatedly also. But we are also aware of the fact that the company CEO took a total remuneration of  150.7 Cr last year!

1. Never do it over phone

Because for one person it is just informing something and getting rid of maximum people in the minimum time. But for the other, it’s a life decision otherwise, especially when he has a family to look after. It’s not easy to take that news.

2. Empathy

Know and take responsibility of what you are telling them. Slowly help them to understand the reality and move on. We don’t call someone and say directly that your family member is dead! We take our time to think, how to let them know the news.

3. Plan the approach

When is the discussion? What all we should say? What we have to offer? Is there anything we can do to help them move on? Can we afford to create an exit benefits plan?

4. The discussion

Take time for the discussion. Let them know slowly but clearly about the elimination. Let them talk and try the best to communicate the situation.

5. Be honest.

Be honest and be direct. Be honest as much as you can about the reason for elimination and how is it going to affect them. Be direct in telling them that they are losing the job and be specific about when. So that you will avoid confusions about what are the chances of rethinking the decisions and is it confirmed etc.

6. Listen

As we all know it’s not easy to take this news .Especially when you have dependents and most of the time our employees haven’t thought of a B plan till date. Because they never thought of losing their job. They will have concerns even after understanding they lost the job. They might be angry, they might be emotional. But take some time and listen to them and then suggest how to move on. But listening is important.

7. Help the transition

Help them to move on, by giving an emotional support, making them aware of the situations and giving references of other employers.

What we can consider.

A severance pay for employees who are getting laid off, to support them during the transition. This could be whatever the company can afford to do.

Outplacement services. Though in India, we don’t have much outplacement programs, we will need it soon and more and more jobs and people are getting affected. Helping them to go ahead with the career, from writing a resume to attending an interview.

As a Psychologist and HR professional, in most of the situations after letting them know about the news and listening to them, I have tried my best by giving maximum references and by helping them with some effective career advice according to their skills and capabilities and most of the professional I know does the same. Now it’s time to spread awareness and share this knowledge.

Yes, this is one of the toughest tasks in management, Hence we need to be empathetic and compassionate while doing so.

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Topics: Employee Engagement, Talent Acquisition

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