In an earlier post, I contrasted how 2 different companies treated the staff they were making redundant. One was well handled; the other poorly.
What happened to the company that handled the process poorly, gives some significant lessons in employer branding and reputation.
1. Threatening letters and emails sent to staff
To recap: An R&D company made 12 of their technical staff redundant. Shortly after the redundancies, some of the ‘surviving’ staff received anonymous emails and letters with comments such as ‘we were the lucky ones’; ‘it’s you next’; ‘the company is going down – we got paid out and you won’t.’
Now anyone with Email Skills 101 knows how easy it is to set up dummy email accounts. Gmail, Hotmail, Outlook, and Yahoo! are all cloud-based email systems. So if someone is disgruntled and wants to email your people anonymously, they can do so under a different name.
The adverse impact from the emails and letters on the surviving staff was significant. Both the CEO and the CFO tried to forensically identify the style and sentiment of the author/s – however, this was met with no success.
Numerous survivors received a fairly steady barrage of taunting correspondence for several weeks following the redundancies. An enormous amount of management and leadership time was absorbed handling the reaction to the letters and emails.
Internal damage control and quashing gossip became high priorities.
At one point, the company even issued cease and desist orders to all 12 of the staff who had been made redundant – but because no specific individuals had been identified as the author/s of the correspondence, the orders to stop were general and toothless.
The orders also caused offence to the innocent redundant staff who had not engaged in the threatening letters and emails.
2. Staff morale and productivity
On the day that the redundancies were made, the surviving staff saw how poorly their former colleagues had been treated.
In the following weeks, the surviving staff had heard no clear ideas how leadership planned to improve the company’s profitability, other than by staff lay offs. Their morale hit new lows.
The threatening and taunting letters and emails continued. Impact on morale and productivity was huge.
Some surviving staff called recruiters, signalling that they now wanted out.
That then opened up the flood gates for other recruiters to pick off some very capable and key staff that the company had not anticipated losing.
With the costs of re-hiring and re-training estimated to be three times the salary cost, the impact of redundancies and the unexpected turnover of key staff has now been estimated to be close to several million dollars – enough to hurt any employer!
And what’s more, the company’s employer brand and reputation have taken a significant bashing.
Not just through online sites like Glassdoor, but by way of word of mouth and from recruiters - many of which have chosen to target the company more for poaching, rather than for placing staff.
What’s the learning here when making redundancies?
A healthy employer brand and reputation are critical to the ongoing sustainability of any employer. Keep these lessons in mind on protecting your employer brand and reputation.
- Treat all exiting staff well on the way out;
- Clearly explain the rationale for the redundancies – emphasising that the decision is not personal to the redundant individual, but instead it’s business issues;
- Just as importantly, explain the rationale to the surviving employees;
- Give assurances to the surviving staff that the business is expected to improve by taking these difficult measures and that their jobs are safe;
- Assure the survivors that management has been requested to escalate cases of any increased workload that cannot be handled and capacity/process remedies will be considered where appropriate;
- Offer outplacement support to all departing employees;
- Pre-empt any adverse impacts on staff, morale, and productivity;
- Consider team building activities to form new and productive relationships;
- Ensure that social media and traditional media channels are given enough information to reduce the impact of gossip, threats, and taunts from former anonymous staff and from poaching recruiters;
- Appoint resources to monitor social media and sites like Glassdoor and respond openly, authentically, and immediately;
- Constantly inform surviving staff and other stakeholders how the company’s performance is improving.
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Learn more about Greg Weiss here.