Routine Layoff? There Is No Such Thing!: Layoff Categories and Considerations

---

Jan 31, 2007 - OI Partners

Given the economic forces at work in the marketplace, layoffs continue to be a business reality in many industries. Our continued experience suggests there is no such thing as a "routine layoff." There are, however, categories of layoffs that bring with them very distinctive considerations and challenges. In the event that one of these categories may be on the horizon in your organization, we offer the following considerations:

Category 1: Economic-Driven Layoffs and Reorganizations Economic-driven layoffs focus on cost containment across all or many departments with a particular emphasis on overhead areas. In larger, mature organizations, these overhead areas (e.g. IT, Purchasing, Accounting, HR, Facilities, Administrative Services) are often populated with a significant number of longer-term, higher-paid employees.

The HR challenge is stabilizing the production of the department(s) going forward, staying free of age discrimination and assuring remaining employees.

Category 2: Post Acquisition/Merger Layoffs Post-acquisition layoffs within publicly traded companies are often seen by many staff as win/win transactions. Increased stock values, attractive retention bonuses and severance and outplacement benefits create an upbeat atmosphere of anticipation.

The HR challenges include maintaining morale and productivity through the ups and downs of a business transfer and transferring accurate employee data to ensure full access to negotiated transition benefits.

Category 3: Consolidations and Closures Business consolidations and facility/office closures bring a different twist to the layoff picture. They often mark the end of an era for a local product or service. These organizations may still be profitable but no longer fit the business strategy or market trends within a changing industry or region.

The HR challenge here is to not only deal with the premature exodus of capable talent who see the handwriting on the wall, but also maintain credibility with clients or customers who may be serviced from a different location or subsidiary.

In Summary

The common denominator in successful layoffs is addressing the concerns of all impacted leaders and employees. HR is the critical link in orchestrating logistics, communications and benefits in a seamless, timely and personal way. There is nothing routine about playing this vital role! Regardless of the type of layoffs you might be facing in 2007, the kind of outplacement services you provide to your impacted staff is of equal importance.

Suggestions for selecting an outplacement provider:

As the complexity and competitiveness of job transition has increased, the corporate demand for "value" in outplacement services remains high. Most firms have embraced technology to provide essential job support and market research tools to its clients. Access to Internet-based, job transition support services will continue to increase service flexibility while reducing the demand for private offices traditionally offered in more senior-level programs. The difference in outplacement service is the transition coaching and consulting received.

Leaders and managers in job transition today must understand the business case they can solve, pay attention to industry turbulence and competitive threats, see career opportunity in the context of career leverage and engage in more sophisticated, multi-optioned compensation package negotiations. The outplacement consultant who services your company's needs must have the background and expertise to add value in these critical, career-making decisions. Today's and tomorrow's outplacement consultants must possess marketing, business and interpersonal acumen that transcends the didactic training methods that worked in a more predictable and less competitive job market.

If 2007 finds you reviewing the value of your outplacement investment, here are four suggestions for selecting an outplacement provider that will address the challenges your departing staff will face:

• * Assess whether the focus of the service delivery model is group instruction or personalized consulting. Senior-level clients are looking for the kind of perspective, insight and direct feedback that surface through a more in-depth consulting relationship.
• * Consider the consultant-to-client ratios in the firm you choose. These ratios are a good litmus test of that firm's ability to address the breadth and complexity of transition issues for more seasoned staff.
• * Inquire about the professional credentials of the consultants used in the programs offered. Advanced degrees, significant years of consulting and/or previous senior-level leadership experience should be in the mix.
• * Examine the levels of one-on-one consulting delivered on the front-end (e.g. contribution assessment, goal formation) of the outplacement program. The greatest value can be in the second half of the program. It's hard to be helpful in the back-end process of offer evaluations and negotiation if the consultant was not significantly engaged in the front-end work of understanding each person's career story and success factors.

Your company's commitment to support transitioning staff with value-added outplacement services will continue to be a worthwhile staff retention and legal protection strategy. Choosing wisely among the many outplacement offerings today will maximize the return on investment for both the company and the leaders and managers receiving this timely service.

Jeff Trautman is vice president/general manager of OI Partners-The Brighton Group (Bellevue, WA). He can be reached at 425-451-3929 or jtrautman@oipartners.net