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Alternatives to layoffs: managing workforce change

Alternatives to layoffs: managing workforce change

In Japan there is a term called mottainai, which expresses regret when something good is wasted. Environmentalists, who follow the mottainai philosophy, look to the four Rs of Reduce, Reuse, Recycle and Repair in all aspects of life.

When it comes to employee outplacement, another form of mottainai: is the waste of talent that can occur when companies do not proactively manage their workforce. When time is tight and with the imperative to cut costs or patch crucial talent gaps, companies often feel they have no choice but to do it reactively – wasting resources, in-house talent and hard-won morale.

Hudson avoids mottainai in the context of managing workforce change by using another principle of four Rs:

  • Redeployment
    You have already invested a lot in your people through hiring processes and ongoing development, so it makes sense to retain this knowledge capital in-house by identifying alternative career paths and opportunities for individuals with identified capability and interest within your organization.
  • Retraining
    Retraining can be costly, but it instills a learning culture in the organization, shows the company is committed to its people and their development, lifts morale and boosts an employer’s brand.
  • Resourcing
    Resourcing refers to critically evaluating your candidate pipeline and sourcing strategies to identify the talent required to fulfill key roles. While certain roles may no longer be required in your organization, or time to retrain is not available, you may need to make some smart hires in other areas to benefit the whole organization by bringing in new knowledge and experience.
  • Layoff
    With the rapid pace of change, advances in technology and increasing pressure to run highly efficient and cost-effective organizations, there will inevitably be roles that are no longer required, resulting in layoff.

When your organization is undergoing major change, how do you choose between the four Rs, or a combination of the four Rs?

For each option, you will need to weigh up the cost with the benefits – financially as well as other factors such as retained people and knowledge, staff morale and brand protection. Every situation is different, and not all of the four Rs will be applicable in every instance.

Haste makes waste

The shorter the timeline to implement a change, the fewer options available to your organization. From our experience, when there’s only a short timeframe available, layoffs are usually the main option that organizations consider.

As far as cost-cutting initiatives go, layoffs can be an expensive option, especially if handled poorly. Not only are there severance payments and potential outplacement costs to consider here, there is also the lost investment from hiring, onboarding and training those people in the first place. There is also lost intellectual property and potentially the impact on an employer’s brand if the layoffs are not managed in a dignified and well executed way. In a worst case scenario this could lead to strikes, negative media coverage and a damaged employer brand. There can also be the negative cost and impact to the morale and motivation of employees that remain in the organization.

By looking ahead at the changes facing the business or industry and projecting your talent needs, you will have more choices among the four Rs to manage the changes in your workforce.

Is technology making some jobs redundant? Does your organization need to offshore roles to remain competitive? Future-focused organizations can run targeted training programs to help their employees keep pace with a fast-evolving business environment and be more adaptable to its new demands.

Equipping people to succeed

Layoffs may still be an inevitable outcome, but with the foresight to implement early intervention strategies, there can be a drastic reduction in the negative impact of this process. Employees equipped with active and contemporary career transition solutions and strategies will be able to access the job market more readily and smoothly transition into new opportunities.

With enough lead time, you can begin a career transition process with individuals who know their roles are ending. Through the process, they can better understand what transferrable skills they possess, be trained with supplementary new skills and set their sights on industries they can reasonably move into.

While layoffs can still be challenging, most people understand that in their career lifespan they are going to go through a career transition process at some stage, and they can regard the situation in a more positive way if the process is managed well.

When time is tight

When organizations come to Hudson seeking help with outplacement, some are already close to the end of the consultation process and require immediate and critical support to implement a career transition program.

However, even in these circumstances, we have had the opportunity to consult and work through the four Rs methodology with our clients to assess if there are other alternatives for impacted employees other than an exit from the organization.

Of course not every employee has the capability or desire for redeployment or retraining. However, by exploring the four-R methodology, there can be an increase in the options available when making decisions on how best to manage talent within an organization. Clients have often been surprised that they have had more opportunities within all four Rs than they originally thought.

Like with the concept of mottainai, with a little planning and strategic thinking, organizations can reduce unnecessary loss of talent by incorporating all four Rs when they need to implement workforce change.

Need assistance with Talent Management? Contact Hudson.

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