Leading Through Downsizing

Downsizing doesn't have to be a train wreck, even though in today's world of Twitter and Facebook, a single employee's bad experience can have a very broad audience.

• By Jennie McKelvey, Jim Colwick
• Oct 01, 2009

We live in an age of uncertainty. Since the 1990s, employees have endured what seems to be a never-ending cycle of restructuring, reinvention, and globalization that has left them with more work and fewer resources. The current recession, with the loss of more than 6.5 million U.S. jobs since 2007, has further undermined the security and loyalty of employees. At the ground level, these changes can have a significant effect on safety, particularly when conditions require a reduction in force. Downsizing affects not only the laid-off employee, but also the community, company, and co-workers left behind. Leaders faced with such actions may wonder: How do I make sure my employees know that I still care about them -- and their safety?

Good question. Research shows the best safety records occur in cultures where people feel they can trust the company, top management, and their bosses to be fair and to care about them as individuals. Moreover, the same cultures that support safety also support and sustain high quality, productivity, innovation, employee retention, and job satisfaction. Yet the current economic environment and organizational changes can leave people, both those laid off and those who remain, with a deep sense of frustration, anger, and fear, as well as distrust in the company and its management. And in today's world of Twitter and Facebook, a single employee's bad experience can have a very broad audience.

Keeping employees safe and preserving the hard-won culture of the workplace is a chief concern of many safety leaders right now. But doing so is tricky. It is a deeper issue than broad pronouncements can solve, and while new initiatives could help, many organizations are simply not positioned to invest in them. The good news is that the solution doesn't have to be costly or time intensive. It simply requires leaders to leverage the interactions they are already having with employees. Knowing what and how to communicate starts with understanding the risks posed by downsizing and adapting a few key practices to help to meet those challenges.

Safety During a Downsizing
Most leaders realize they are responsible for people's physical safety. Smart leaders are also effective at creating a sense of emotional safety, where employees feel secure in bringing up ideas, asking questions, and contributing to the organization's goals. But how do you protect employees physically and emotionally while having to take actions that seem to contradict those objectives? A layoff poses particular risks to safety because it has impacts on the culture, the employees, and the perceived integrity of the company itself.

The Risk to Culture. The norms of behavior, values, and beliefs that make up culture play an important role in safety outcomes. They are also based fundamentally on the relationship that employees have with the organization and their leaders. Layoffs directly challenge these relationships, potentially making more difficult the use of established safety practices, processes, and tools. Will employee exposure to injury really increase because of a perceived lack of concern? Data show it is likely; higher perceptions of organizational support correlate to better safety outcomes. Leaders can mitigate these effects by intentionally aligning their behaviors with messages that demonstrate concern, even in the midst of making very difficult decisions.

The Risk to Employees. Once the decision is communicated that an involuntary reduction in force will occur, employees will naturally personalize the event: "What will happen if I am laid off? How should I react to how I was laid off? What if I'm one who remains?" Clearly, there are many effects -- both tangible, such as loss of a paycheck or benefits, and intangible, such as the loss of an important community or the identity associated with the workplace or the job. Employees who remain will watch how leaders behave and how departing employees are treated. And they will wonder whether they will be treated the same way down the road. In the best scenarios, openness, feedback, and communication are enhanced or improved. In the worst, suspicion grows, fear develops, and just when organizations need the talents of their employees the most, they've put their heads down and do only what is asked or required.

The Risk to the Company. Leaders must consider the long-term effects of a reduction in force on the company itself. Chiefly, leaders need to ask about their employees: "Given the opportunity, would they want to come back when the economy turns around?" That will largely depend upon how they were treated when they left. In addition to retaining or attracting future employees, companies also must consider the reputation they earn in the broader community. Would laid-off employees represent a positive picture of the organization to their neighbors and acquaintances, for instance telling them that while they did not want to leave, they understand why, were treated fairly, and would return given the chance?

Five Critical Leadership Practices for Hard Times
Leaders, like employees, often feel as though they are caught in a vise grip created by the economy and have few options. Yet leaders can make a significant difference by implementing five critical practices to ease employee transitions and to develop a culture of trust and commitment focused on safety and organizational performance.

1. Communicate, communicate, communicate. Share what you can, when you can, both internally and externally. Don't assume the message is heard one time or should occur only when every detail is worked out. Frequent, accurate, consistent information is always better than leaving others to fill in the story or to have the rumor mill advance information that may be inaccurate.

2. Be honest. Even if the message is difficult, people want to know. Clarity helps them to take action and to plan, while confusion or mixed messages can paralyze and cause distractions. If it is uncertain how many people will ultimately be laid off, indicate as much. Make promises or guarantees only if they can be kept. Leadership credibility and the credibility of the organization will be measured by how well leaders do what they say they are going to do.

3. Treat employees with respect and dignity. Many organizations have specific protocols and procedures for employees leaving the organization. Smart leaders find a balance between adhering to the procedure while also allowing the affected person to feel respected and retain his dignity. For example, organizations may require a security guard to "walk out" an employee. While some circumstances may dictate strict security, employers should seize opportunities to do this in a way that illustrates caring. More respectful practices include allowing the employee to say goodbyes, providing him a moment to reassure or be reassured by co-workers, or allowing him to clear out his workspace outside normal work or shift hours (another person needs to be present).

4. Ask for feedback. Solicit feedback often and from multiple sources. Gather it personally when possible. Actively listening to and responding to another's concerns, questions, or suggestions personalizes organizational support to employees. Smart leaders ask questions, such as: How can the organization communicate better? Are there specific concerns about how the downsizing has occurred? Do you have lingering concerns that have not been addressed?

5. Reiterate your commitment to safety and employee well-being at every opportunity. Explicitly express the ongoing focus on safety. Express the potential increase in exposure that distractions can create and the countermeasures you expect employees to take to reduce the exposure to acceptable levels. In the shift after layoff announcements have been made, the supervisor who stops to talk to each employee on his crew to see how they are doing is able to respond individually or if necessary with the whole crew. Taking this time allows the supervisor to address questions, refocus on work, or establish countermeasures, such as increasing safety observations. Share the message there are currently some factors outside your control, but helping each other to accomplish the work and focusing on safe behaviors is within your control right now. The central message is, "Let's take care of each other."

Finally, what can employees do? If there is a sixth best practice that reinforces all of the others, it is for leaders to encourage employees to communicate with them about what is going on. Employees help leaders refine these practices when they provide honest feedback, suggest recommendations for improvement, ask for help, and speak up about lingering questions.

A reduction in force does not need to mean a reduction in safety performance. The practices that smart leaders use are not new, nor should they be confined to hard times. Tough times can provide an opportunity to develop new strengths. With special attention and disciplined implementation, leaders who use these practices improve their chances of getting through a layoff with a healthy culture and employee well-being intact.