How to retrench and remain 'employer of choice'

Redundancy is a fact of life for most companies. So how can you undertake this unpleasant task of terminating jobs whilst ensuring that the company remains an employer of choice?

Telling employees they must leave an organisation is likely to be a painful experience for everyone involved. However, once the business decision has been taken, it should be viewed objectively and managed professionally, sensitively and skilfully.

All employees deserve a high degree of compassion and consideration, whatever their circumstances. Therefore careful planning and preparation for well-structured meetings will go a long way towards ensuring that the departure of the employee takes place with dignity and respect.

The objectives are:

• To minimise stress and strain on the departing employee(s)
• To promote a corporate image of care and concern
• To minimise the impact on morale and motivation of those remaining

Planning Stage
Although individual circumstances will vary, it is crucial that both the HR staff and line managers know and fully understand the reasons for any termination and that the decision has the support of senior management and the ratification of legal advisers.

The decision to impose redundancies could be due to any of the following:

• Internal re-organisation
• Change of business emphasis
• Withdrawal from a market or product
• Cost cutting
• A merger or acquisition
• Technology development

Whatever the reason, the criteria for selecting who is leaving must be fair and non-discriminatory. This is not just for legal reasons: it is important that whoever is delivering the message can explain the reasons confidently, clearly and concisely.

The decision should be final and not negotiable. Making the process as transparent as possible will maximise the opportunity for the organisation to present itself in a professional and positive light to its employees and the market at large.

Training
Running a termination meeting is extremely stressful for line managers and HR staff. It is essential that the meeting is run in a professional manner since the company's reputation is at stake.

Preparing all the paperwork and knowing beforehand precisely what you are going to say and how you are going to say it will ensure that the meeting is under control at all times. If this is a manager's 'first time', some rehearsal beforehand would be beneficial.

The tone of the meeting and how the message is conveyed will have an impact on how the individual may react. Bear in mind that this meeting will be the employee's last impression of the organisation. It is a final chance to influence how a former employee will present the organisation to outsiders.

It is essential to:

• Ensure that you understand the reason for termination
• Write down the main things you intend to say
• Think through possible reactions to the news - these could range from shock or anger to relief and happiness. Consider your response to any awkward questions
• Write down a structure of the meeting eg.
  -  Set the scene
  -  Deliver the news
  -  Talk about the future
  -  Bring the meeting to a close

The termination meeting
Choose a neutral place, preferably away from the individual's working area, where the interview can be handled privately and without the risk of interruptions. Try to avoid meeting 'across a desk' if possible. Arrange chairs in such a way that the individual has a feeling of space and can avoid constant eye contact - there may be some emotion to express.

Ideally, the meeting will take place on a one-to-one basis, although it is often acceptable for the line manager and the appropriate HR person to be present together. Consider having tea, coffee or water available and a box of tissues, out of sight, may also be useful.

The person
Good employers treat their employees as individuals, so you need to know about them. Basic information such as age, job title/position, length of service, address, salary and benefits should all be ascertained before the meeting takes place.

It is also helpful to know their personal circumstances: are they married, partnered or single? Do they have any current health issues or any financial problems? These are all relevant in the circumstances and can effect how they will react once the news has been broken.

If you are unsure, check the legal situation of pregnant women with maternity rights or employees who have been on long term sickness absence and, in any case, treat them with sensitivity.

The timing
This is a really important consideration. Be fair to the individual by choosing a day or time that will provide space for him/her to absorb and adjust to the news before going home to their family/partner.

• Avoid Friday afternoon
• Be sensitive to people who live alone or who might not have anyone with whom to share the news and feelings
• Avoid lunchtime and the end of the working day
• Consider when the individual will be able to return to the office/department, collect belongings and leave calmly and with dignity
• Avoid significant dates: birthdays, anniversaries, even just before a holiday
• When several individuals are affected at the same time, check that the relevant employees are all present. Resolve how to deal with absentees
• Consider when you will notify relevant colleagues, for example: in IT security

The Documentation
A prepared letter should be handed out at the meeting. The letter (checked by your legal advisers) should be addressed personally to the individual and might include the following:

• Confirmation of reason for the separation
• The effective date of the termination of the contract of employment, ie: the date on which the individual will be taken off the payroll
• The date of departure - will the individual be leaving immediately or working through their notice period?
• Financial details, eg: pay in lieu of notice, outstanding salary accrued holiday pay, any bonus considerations, etc
• Information about the provision of outplacement facilities and support
• Information about how and when the separation payment will be made
• Expectations and actions with regard to benefits such as company car, private medical insurance, pension and life cover, share option scheme
• Action to be taken for the return of company property, eg: laptop computer, mobile phone and security passes
• The individual should receive a duplicate of the letter for signature and return by an agreed date as acceptance of the terms and conditions regarding the termination of employment.

The next meeting
Do not assume that the individual hears anything after being told that they have lost a job!

It is important to plan a time and place for further discussion, perhaps a day or two later when feelings might have settled and thoughts have become clearer. This meeting will allow them to ask questions about the termination package, references and any other aspects of their departure.

The departure
Having concluded the meeting, the individual will need to know where to go next. Can they return to their desks? Should they be accompanied? If they cannot return, or do not want to, who will bring their personal belongings to the meeting room?

In some instances it is necessary to ask the individual to leave immediately. If so, be sensitive as to their emotional state. Are they, for example, fit enough to drive home?

Internal/external communication
News of redundancies will quickly spread around the company and rumours will inevitably circulate.

It is advisable to communicate the news to immediate colleagues, associated departmental heads and any other people who need to know as soon as possible.

Use the opportunity to confirm your appreciation of their contribution in these difficult times and let them know how to respond to business enquiries for individuals who have left without going into specific individual details or underlying reasons for their departure.

Providing coherent information is an important way of communicating positive messages about how redundancies have been handled.

Depending on circumstances the press might well show interest too and consideration should be given to a press release and arrange for any enquiries to be handled by one appointed person.

You may choose to approach the press proactively to clarify your position, it will enhance your image if you can publicise a responsible approach to those individuals affected by redundancies.

The staff who are left behind may show a variety of reactions about their colleagues from shock, anger, guilt to disbelief and even relief! They will also be anxious about their own future within the company and these issues must be addressed immediately. Their commitment to the business decision is essential for the company to achieve its objective without a lessening in productivity.
Communication needs to be increased. Line managers should be able to talk through individual issues and be visible. This is no time to hide behind a closed door.

Summary
But how do you measure a successful redundancy exercise? Very few people will tell you it has been a pleasant experience. But if they feel they were treated fairly and that the managers were well prepared, had all the documentation to hand and treated them as human beings they should leave the company with few hard feelings.

For those staff remaining in the company, if they see the departing employee being treated with respect and if quality outplacement is provided to see those people into a new job, then they will know that their company is one that values people. 

For further information please email: jane.rothwell@e-penna.com or visit the Penna website: www.e-penna.com.

The don'ts
The don'ts of delivery

• Don't conduct these meeting without privately rehearsing exactly what you will say
• Don't talk about your needs, feelings or problems
• Don't criticise the organisation's business strategies or senior management
• Don't shout, even if the employee does!
• Don't say 'I know how you feel', because you don't
• Don't imply this news is a blessing in disguise
• Don't rush through the meeting because you are feeling uncomfortable. Take time to answer questions-remember that this is the last impression of the company that the individual will have
• Don't make promises you can't keep

Outplacement support
Providing outplacement support through an external career management company is common practice in most major companies. Why? The answer is not only to support the ex-employee with expert coaching to run an effective job search campaign. It is primarily to ensure the company's reputation as an employee of choice is retained, which is especially important to those staff remaining in the company. It is a very positive and motivating message - this is a company that puts people first.