Downsizing Checklist

The Layoff Checklist

Staff movement and layoffs are a fact of life, whether you are in a large or a small organization. The downsizing process is never simple and often unpleasant, especially if it is badly planned, managed and implemented. Your local HR department will have the most relevant experience and knowledge on how to do this, in the most professional and humane manner. The short checklist provided here is more concerned about the methodology rather than the reasons behind it. The checklist covers the main topics that every manager should know and understand prior to terminating one or more employee(s).

The CHECKLIST

□ If its possible, communicate with and prepare your staff for the possibility of layoffs in advance. No termination should come as a complete surprise to an employee under any circumstances. They need time to consider or imagine the possibility.

□ Put your rationale in writing as well as explaining your decisions to upper management if necessary. Puting it in writing provides clarity and negates ambiguity and doubt.

□ On a practical level, establish a detailed plan for handling the workload after the layoffs have occurred, given that there will often be a period of low morale and disruptions.

□ Make a list of key files any employee may have, and arrange for their transfer.

□ HR are your touchstone, so check with them often. There will be defined procedures to follow; get the paperwork right, collect keys and badges, etc. HR people can give you helpful advice on dealing with the more emotional aspects of a layoff, and often provide supportive techniques for delivering the bad news and dealing with the reaction..

□ Keep everything on a safe legal footing. There may be specific things that you must, or must not, say. It is a time when you can easily leave yourself and the company open to litigation.

□ Put in place IT & Security policies to cancel access privileges immediately (within a few seconds) after terminating anyone. Angry or disgruntled ex-employees can and will, do significant damage to your systems the moment they return to their desks. Do not underestimate the impact of this. There are many documented cases of this happening.

□ Establish, in advance with all parties concerned, what will happen before, during and after the termination interview, e.g. who will escort employees back to their work space, how long the laid-off employees will have to gather personal belongings and who will collect keys and badges, etc. Normally security will play a role here. They are less 'involved' with the staff than the management and can be very professional and objective.

□ Managing the guilt and emotional reactions of the “survivors” as early as possible, is essential. Arrange to meet with them to communicate what has happened and why. Then explain the new work plans, address their fears and answer their questions, no matter how difficult

□ Do not forget your own feelings and emotions in all this and seek some good advice from your HR department. They will be best placed to tell you how to deal with what is happening. You are also one of the 'survivors' and you will be expected to do more with less, once the downsizing operation is complete.

The Survivors' Guilt

“But at least you still have a job.”

Yes, those who survive the all-too frequent layoffs are very grateful for their work, but studies show that the stress from all the upheaval can wreak havoc on their health, morale and productivity. And don’t expect them to work harder out of sheer gratitude

Working with the survivors is challenging. These people have lost good friends, vast quantities of institutional knowledge, pay raises, benefits. Plus, they are being asked to take on other people’s work and add it to their own heavy load. The company is expecting them to be upbeat about it.

There’s that low-level anxiety, vulnerability to colds and flu, aches and pains, sleeping difficulties. When you’re anxious, waiting for that next shoe to drop, your body stays in a kind of fight-or-flight mode. Your body is overproducing adrenaline and cortisol. The hormones you need to sustain yourself during a crisis and the substances your body is producing are very toxic.

There can be guilt that they were spared. This can manifest itself as, anger and depression. Clearly, there’s a huge increase in insecurity and that uncertainty is very destabilizing.

As part of a 10-year study of downsizing at a major U.S. manufacturer, looking at depression in workers, in surveys two years apart in the ‘90s.

Depression scores dropped by more than half in those who took a voluntary buyout. There was little change in those who left involuntarily, but, interestingly, depression scores rose slightly among the workers who stayed on.

From the company’s data on sick leave, it was found that managers and other higher-skilled workers took more sick leave, possibly to look for other jobs. Less-skilled workers, meanwhile, took less sick leave and absenteeism at the company declined as workers hunkered down, trying to hang on to their jobs. Remembering that this was in a job market much more favorable than that of today.

This points to research that layoffs often don’t improve companies’ financial performance – essentially the reason they are done in the first place – and to a 2003 study by the Institute of Behavioral Science that found that people who had seen co-workers laid off reported poorer mental and physical health than workers who had not been exposed to layoffs at all.

The whole metaphor breaks down. We’re a family. We take care of each other and you don’t divorce your children.

Reporting even worse health and attitudes were layoff survivors who were shifted to different positions or departments within the company.

One of the inherent dangers for companies is that handling layoffs badly can taint the perceptions of those who are left. They’re the ones the company is relying on to move the company forward, yet that depends on the respect that remains for those who have led the downsizing.

A lot was going on with the companies studied, including a merger, an increase in outsourcing and a move away from its “we’re a family” culture towards a shareholder-driven, profits first company. Workers took that as a betrayal, with comments that they were being treated as a number or an expendable commodity.

It’s hard enough for workers to concentrate when rumors are swirling at the water cooler and online and these can quickly turn toxic in the absence of reliable and reassuring information from the company but to see coworkers escorted from the building like criminals only severely hurts morale.

Though plenty of articles say productivity goes down for layoff survivors but it’s not that simple. It depends on how productivity is measured and the economic climate in which it occurs, e.g. any form of restructuring and change will take some getting used to.

Workers need time to grieve after a layoff, just as they would a death in the family and workers who have to take up the slack might require more support and training, which suggests there will certainly be a period of inefficiency until everyone is up to speed on the new tasks.

A recent US survey report bears a real sting. It’s based on surveys of 4,172 workers who survived corporate layoffs. In the study:

• 75 percent said their productivity has decreased.
• 64 percent said it's true of coworkers.
• 69 percent said the quality of the company’s products or services has declined.
• 81 percent said customer service has been hurt.
• And 61 percent believed the layoffs have hurt their company’s future prospects.

The bright spot in the survey, however, echoed the advice of many experts: You can lessen the blow by being as open and forthright with employees as possible. Workers who rated their managers as visible, approachable and candid, even when there was nothing new to report, were much less likely to report these declines. You really can’t over-communicate during these events.

Let your surviving workers know that they are here because they are the right people for the job. Let them that you believe in them and together they can work to get the company through these very challenging times. You’ve got to show them your respect, trust and appreciation. Help them prioritize their work. Let them know why they are there and let them know how they can help and how you are going to support them.

This is not the time to sit quietly in your executive office and neglect your people. They need leadership and they need it now. You have to be out there amongst them, letting them know what’s going on and have them feel that you’re fighting for them.

Reduced Security

An urgent demand for talent in several areas is eclipsing broad, knee-jerk reactions to greatly reduce budgets and cut staffing levels, projects and fixed asset purchases, without thinking carefully about the consequences and future requirements.

Undeniably employers made mistakes in past downturns, huge miscalculations founded in the white hot heat of cost-cutting that wounded them badly later on. It limited their ability to respond quickly and when the smoke cleared and the rebuilding started, they were left floundering.

It just shows how little IT management has learned since last time. Managers have not learned the lesson that it's not just about cutting spending, it's about managing the risks and being smart within their spending limitations. Know your boundaries and work within them.

One of the worst instancies if this in the IT security field. Current economic conditions are having a negative impact on the majority of security budgets. Many companies have initiated a hiring freeze or staff reduction exercise, necessary measures due to the financial crisis.

Security-decision makers in over 100 companies have been asked about their spending plans for the coming year and to gauge the impact current economic conditions are having on budgets. Of 159 respondents, 64 percent indicted that the economy was having a negative impact on security spending. Another 19 percent said the economy currently had no impact. Just 6 percent said the crisis was having a positive impact on their organization's security budget.

Security budgets will decrease for 35 percent of respondents and remain the same for 42 percent. Just 23 percent thought spending would increase in the coming year. Those numbers are a switch from last year, when more companies expected to increase security spending. In 2008, 38 percent of companies planned to increase their security budget and just 24 percent expected to see a decrease in spending.

One firm is actually in the minority and plans to spend more on security in the coming 12 months. "We are increasing from previous years. I would have to say the increase is around regulatory issues as well as general responsible security program expansion."

Security spending is often driven by compliance and policy decisions. This falls in line with what other companies also said, with a majority indicating that policy and compliance are the main justifications for security spending.

Security decision-makers were asked if they planned to increase or decrease spending in the following areas: Business Continuity/disaster recovery, data loss prevention, identity management, compliance and regulations, outsourced security systems, physical security, policy and risk management, and staff.

In all but one category, more than half of respondents expected spending to remain at similar levels.

However, when it comes to spending on staff, 41 percent expect to see a decrease in spending. Close to 60 percent have either implemented, or plan to implement, a hiring freeze.

Additionally, 35 percent of companies asked, indicated they have had to go beyond a hiring freeze and have actually reduced security staff, or plan to reduce headcount in the next 6 months. It will be interesting how this affects security in the coming months and whether we will see more outsourcing of protective measures. A dangerous path to walk and one that can only increase the threat to organisations.

Let's hope we soon see an end to these 'interesting times'

Stay Focused - Tough Times ahead

Budget cuts. Layoffs. Doing more with less. Sound familiar? Every manager is suddenly tasked with putting out fires on multiple fronts, as businesses struggle to survive amid the economy's smoking ruins. Don't forget your day job, little things like keeping the service levels (SLAs), servers and network availability in the greenest of green.

The mounting responsibilities and demands can be both personally distracting and professionally discouraging for some IT and business managers: The US's work-related worries jumped from 62 percent to 67 percent between April and October 2008, according to the American Psychological Association.

Now, more than ever, focus is the name of the game, especially when people and money are tight.

Finding and maintaining your office Zen isn't as easy these days. Drawing on past experiences, here's how some current and former CIOs have maintained focus in their role and within their department during a crisis.

"After the dotcom bubble burst in 2000, business was struggling and the workplace was pretty tense," recalls Les Duncan, then senior vice president and CIO at Joann Stores.

To ease staff concerns, Duncan held regular meetings where he could speak directly about business conditions and highlighted that week's or month's hot issues. His staff knew how the company planned to weather the difficult times so they could focus on their work, he says. "This transparency also helped me to stay focused on what was really important i.e. the success or failure of the business during hard times."

Get busy and stay busy. We've all worked at businesses where large numbers of employees were cut from the payroll. Most of the employees ran around huddling in small groups talking about the latest rumour, but you want to be in the group that stays busy and focused on delivering. So busy that you don't have time to whine.

Positivity and flexibility is essential in staying on target at work. "Anticipate changes by checking in frequently with business decision makers and stay on the offensive by killing projects that are going nowhere".

Try to see the opportunity in any major change. It's a good time to offer assistance to colleagues and take on tasks that might normally be outside your scope. This is not the time to hide in an IT or business silo, but the ideal time to step out of it. Create the space and opportunity to innovate. It costs very little and can result in new opportunities and growth.

Outsourcing Risks - 25 Most Dangerous cities

After an eventful year that saw terrorist attacks in Mumbai, kidnapping for profit in Mexico, and the unexpected meltdown of Satyam, one of India's biggest IT services firms, the corporate cries to get things done "better, faster, cheaper" and offshore, may begin to be drowned out by the more moderate mantra of today's outsourcing customer: "safer, more stable and definitely more secure."

Interruptions to business customers have upset the sense of security that made Indian offshore outsourcing an uncomplicated buying decision. Companies are putting on hold the offshore projects that were routine just a year ago, puting more effort into investigating and analysing alternatives that help mitigate unresolved risks.

Promising locations like South Africa, Columbia, Malaysia, Thailand and Mexico have done little in terms of government initiatives or social change to allay client fears about their safety, as an outsourcing destination. Some countries with more established IT export businesses e.g. the Philippines and Brazil, have progressed slower than expected.

India's "tier II" cities, once poised to take business away from the cities like Bangalore, do not have the infrastructure and social improvements necessary to compete. India's track record does not bode well for fast development. This making other locations such as Latin America and central and eastern Europe more appealing to corporate organisations.

A number of emerging offshore locations have made great strides in mitigating risks inherent to their countries, while still keeping their costs and overheads low, e.g. Poland, the Czech Republic, Chile, Egypt, etc.

The risk factors involved in offshore outsourcing e.g. terrorism, potential war, disaster, network breaks, environmental disregards, crime and epidemic disease, make contingency plans a greater necessity. The emerging trend currently, is for IT outsourcing customers to seek out solutions closer to home, nearer their own shores or in the same country, where potential problems can be more readily understood, predicted and better managed.

The 25 Riskiest Outsourcing Cities in the World

Rankings based on mean scores in ten areas of risk as reported by The Brown-Wilson Group's "2009: The Year of Outsourcing Dangerously"

1. Bogota, Columbia
2. Bangkok, Thailand
3. Johannesburg, South Africa
4. Kuala Lumpur, Malaysia
5. Kingston, Jamaica
6. Delhi/Noida/Gurgaon, India
7. Manila/Cebu/Makita, Philippines
8. Rio de Janeiro, Brazil
9. Mumbai, India
10. Jerusalem, Israel
11. Curitiba, Brazil
12. Dalian, China
13. Juarez, Mexico
14. Brasilia, Brazil
15. Chandigarh, India
16. Colombo, Sri Lanka
17. Ho Chi Minh City, Vietnam
18. Quezon City, Philippines
19. Accra, Ghana
20. Pune, India
21. Chennai, India
22. Hanoi, Vietnam
23. Bangalore, India
24. Hyderabad, India
25. Kolkata, India

The Worst Three Cities for;

Corruption & Organized Crime

1. Bogota, Colombia
2. Juarez, Mexico
3. Johannesburg, South Africa

Heightening Trans-national & Geopolitical Issues

1. Delhi/Noida/Gurgaon, India
2. Jerusalem, Israel
3. Colombo, Sri Lanka

Unsecured or Unprotected Networks and Infrastructure

1. Bogota, Colombia
2. Bangkok, Thailand
3. Kingston, Jamaica

Unstable Currency

1. Bangkok, Thailand
2. Bogota, Colombia
3. Johannesburg, South Africa

Personal Crime Rate/Police-to-Citizen Ratio

1. Bangkok, Thailand
2. Johannesburg, South Africa
3. Rio de Janeiro, Brazil

Environmental Waste & Pollution

1. Bangalore, India
2. Chandigarh, India
3. Kuala Lumpur, Malaysia

High Terrorism/Insurrection Threat

1. Mumbai, India
2. Delhi/Noida/Gurgaon, India
3. Jerusalem, Israel

Legal System Immaturity

1. Bangkok, Thailand
2. Bogota, Colombia
3. Kingston, Jamaica

Weather/Climate Threats

1. Kingston, Jamaica
2. Manila/Cebu/ Makati, Philippines
3. Bangkok, Thailand

Caution! - Downsizing ahead

Are you a Target?

1. You're being left out of important meetings.
Challenge the fact that you're not being invited to important meetings. Your omission may simply be an honest mistake (unlikely). Explain what is missing in their approach e.g. new insight or important perspective. Stress that you will bring added value to the meeting and assure the 'leader' that you will strengthen his position by supporting him, given the opportunity.

2. Your span of control is shrinking.
Be proactive. No one is going to give you anything.

• Hunt down and capture new responsibilities on your own initiative.
• Research possible new product lines.
  
• Propose strategies and tactics to fend off the competitors.
  
• Conduct in-depth analysis of competitors and expose possible weaknesses.
  
• Make your presence known by attending voluntary meetings and corporate outings.
• Volunteer to organise events that demonstrate your wide range of under-utilised talents.

3. Your projects are getting cancelled.
Check that you, your boss and company's priorities are properly aligned. Find the key project that's aligned with corporate goals and get on board. See previous paragraph for finding new projects. Even if it is outwith your job title. Be 'flexible'. Your company is going through difficult changes. Show your willigness to change and grow with it.

4. You have a new boss.
You made the old boss look good so, make the new boss look better. If you demonstrate to them that you're there to make them look good and can achieve their goals, they won't want to let you go, immediately. Not until they find someone faster/cheaper/younger and better connected.

5. Your company's financial statements are bleeding red ink.
Wake up and smell the Java, the company is struggling you and your peers could get laid off no matter what. Start networking now, get your résumé into shape, start blogging and look for a new job.

You will find that your old friends and colleagues will be only too happy to hear from you, because they will be facing similar issues. A bit like rats congregating to jump onto the iceberg before the ship hits it.

• Make your presence felt.
• Raise your Profile.
  
• Be clear in your goals, don't be invisible

Whereas all deceptions requires secrecy, all secrecy is not deception

The nature of things

Two Buddhist monks were washing their bowls in the river when they noticed a scorpion that was drowning. One monk immediately scooped it up and set it back on the bank. In the process he was stung. He went back to washing his bowl and again the scorpion fell in. The monk saved the scorpion and was again stung. The other monk asked him, "Friend, why do you continue to save the scorpion when you know it's nature is to sting?"

"Because," the monk replied, "it is my nature to save it."

Another version of this story describes a fox who agrees to carry a scorpion on its back across a river, but only on the condition that the scorpion does not sting him. 'If you sting me, I will be unable to swim and we will both die from drowning'. The scorpion agrees that it would make no sense to sting the fox and cause them both to drown. So they set off across the river.

But the scorpion does indeed sting the fox when they are in midstream. As the fox begins to drown, taking the scorpion with him, he pleadingly asks why the scorpion has killed both of them by stinging him. "Because I am a scorpion and it's my nature."

It is a truism that you will not change the nature of people either and you would be foolish to try, unless you are a trained psychologist or psychiatrist and are assisting in 'rectifying' a disabling condition that the patient is striving to resolve.

We are familiar with many truisms; don't swim against the current or sail out on an incoming tide, always consider the grain when working in wood, don't have a dog if you don't want it to bark, don't have children if you expect your life to be unaffected by it, etc.

As a people manager you are compelled to consider their strengths and weaknesses (SWOT). You will develop their strengths and be active in supporting their weaknesses.

If you want them to change their jobs or responsibilities you need to gain their support by communicating to them as responsible adults, as well as clearly defining the need and benefits of changing. Having done that, stand back and allow them to question your argument in depth before they will finally accept what you have proposed.

Their arguments will highlight where they are insecure about the proposal or will identify a possible weakness in your plan. Both are good and both should be considered as positive feedback and addressed with your full attention.

If you want people to change their nature, re-invent themselves and become something else entirely, then I am afraid you will be bitten, maybe several times and still not achieve what you wanted.

Use the work-force!

Blind Faith is a wonderful thing but it will not help you catch a fish!