Break­ing Up Is Hard To Do (Right)

Com­pa­nies that fought to at­tract and keep staff have been learn­ing the hard way how to shed them in a hurry. But that doesn’t mean it can’t – and shouldn’t – be done right


There are too many sto­ries of en­ergy firms that have let go of loyal, hard­work­ing staff the wrong way. Here’s how to do it with re­spect and sup­port

ONE DAY LAST OC­TO­BER, when em­ploy­ees at Cen­ovus En­ergy showed up at the of­fice, many dis­cov­ered that they couldn’t ac­cess their com­puter files on the com­pany’s in­ter­nal sys­tem. That’s how they found out they were be­ing laid off. Two months ear­lier, em­ploy­ees at Hutchi­son Ports Aus­tralia in Syd­ney and Bris­bane got a text mes­sage, then an email in the middle of the night invit­ing them to a beach­side ho­tel. They, too, were be­ing laid off.

Cen­ovus called its move a mis­take. Hutchi­son Ports Aus­tralia said it had be­gun its con­sul­ta­tions with staff and unions re­gard­ing re­dun­dan­cies in June. What­ever the ex­pla­na­tion, com­pa­nies need to start ap­proach­ing lay­offs more care­fully. And though ev­ery­one in the en­ergy busi­ness is hop­ing the blood­let­ting is over, if it isn’t, there are ways to soften the blow of lay­offs, and do them fairly and trans­par­ently.


A com­pany should keep its em­ploy­ees in­formed of the eco­nomic forces act­ing on the busi­ness and their em­ploy­ment prospects, says Martin Birt, pres­i­dent of and a hu­man re­sources con­sul­tant with 30 years in the busi­ness. “Clo­sures…should never, in my view, be a sur­prise,” he says. Nei­ther should lay­offs. You can com­mu­ni­cate mes­sages with your em­ploy­ees such as how de­ci­sions will be made in what Birt calls a “long-game com­mu­ni­ca­tions plan,” a set of HR prin­ci­ples that will be ap­plied should any­thing be de­cided re­gard­ing the com­pany’s long-term em­ploy­ment po­ten­tial. That way, em­ploy­ees have some con­text as to what to ex­pect when mar­ket cir­cum­stances change.

If you choose not to share your long-game com­mu­ni­ca­tions plan in your em­ployee man­ual, when speak­ing to the peo­ple you’re lay­ing off, at least com­mu­ni­cate how, why and when you made the de­ci­sion, Birt says. Your ac­tions will get back to sup­pli­ers, con­trac­tors and lay­off sur­vivors. And if you’ve com­mu­ni­cated fairly and awarded ap­pro­pri­ate com­pen­sa­tion and ben­e­fits, the ex­ter­nal en­vi­ron­ment will un­der­stand what kind of cor­po­rate ci­ti­zen you are.


In­volve the cor­rect teams – op­er­a­tions, hu­man re­sources and le­gal – and in­volve them as early in the de­ci­sion-mak­ing process as pos­si­ble, says Birt. Th­ese teams will pro­tect you as a cor­po­ra­tion from any li­a­bil­ity as­so­ci­ated with a lay­off.


Henry Horn­stein is an as­sis­tant pro­fes­sor at Sault Ste. Marie, On­tario’s Al­goma Univer­sity, spe­cial­iz­ing in or­ga­ni­za­tional change man­age­ment. In the early 1990s, he was among the staff let go from Im­pe­rial Oil’s Strath­cona re­fin­ery. “It was not pleas­ant,” says Horn­stein, “but the way Im­pe­rial Oil han­dled that at the time cush­ioned the blow.” They pro­vided him with a year’s worth of salary and ben­e­fits, and ser­vices with an out­place­ment firm. Th­ese in­cluded re­sumé writ­ing, in­ter­view train­ing and net­work­ing sup­port. “Rather than treat­ing peo­ple as com­modi­ties, peo­ple are treated com­pas­sion­ately,” says Horn­stein of the ex­pe­ri­ence. You can pro­vide your em­ploy­ees with psy­cho­log­i­cal sup­port in ad­di­tion to proper sev­er­ance, ben­e­fits and out­place­ment ser­vices, he says. Con­sider of­fer­ing group meet­ings where peo­ple can talk to oth­ers about the neg­a­tive psy­cho­log­i­cal im­pacts of down­siz­ing that they’ve ex­pe­ri­enced. “Down­siz­ing is a sig­nif­i­cant as­sault on an in­di­vid­ual’s self-es­teem…Ev­ery­body has a story, and when some­body is down­sized, the or­ga­ni­za­tion can [seem to] take an ap­proach that they don’t care what the back­ground story is, they just want to get rid of the peo­ple.” says Horn­stein. Birt agrees, say­ing com­pa­nies should be pre­pared to of­fer an em­ployee as­sis­tance pro­gram (EAP), a short-term coun­sel­ing ser­vice for em­ploy­ees in need of sup­port. This can also add a buf­fer against the com­pany’s li­a­bil­ity.


Hav­ing said that, to main­tain con­fi­den­tial­ity, limit the plan­ning group to only those whose par­tic­i­pa­tion is nec­es­sary, says Birt. Con­sider us­ing spe­cific pro­ject-re­lated con­fi­den­tial­ity agree­ments, as well, and clearly de­scribe the con­se­quences for breach­ing con­fi­den­tial­ity. He also sug­gests re­mind­ing par­tic­i­pants with pre-ex­ist­ing con­fi­den­tial­ity agree­ments of the terms of those agree­ments. If you are a pub­licly traded com­pany, you should know if you are re­quired to first in­form the mar­kets of your ac­tions. If that is the case, man­agers must be pre­pared to com­mu­ni­cate with em­ploy­ees im­me­di­ately af­ter in­form­ing the mar­kets.


Be­fore you de­liver the news of lay­offs, fi­nal­ize all the de­tails with hu­man re­sources and le­gal, in­clud­ing sev­er­ance, ben­e­fits and pen­sion en­ti­tle­ments, says Birt. You’ll be pre­pared to im­me­di­ately an­swer in­di­vid­ual ques­tions. Ev­ery­thing you say orally in a ter­mi­na­tion meet­ing should be cap­tured in a ter­mi­na­tion let­ter as well, he says. How­ever, give ter­mi­nated em­ploy­ees a few days to re­view their ter­mi­na­tion pack­age and ask any ques­tions, says Fraser John­son, a pro­fes­sor at the Ivey School of Busi­ness in Lon­don, On­tario. “As soon as you hear the words that you’re be­ing laid off, your mind might go blank,” he says.


Rather than tar­get­ing em­ploy­ees with lay­offs, share the cuts across the cor­po­ra­tion, just as Cana­dian Nat­u­ral Re­sources did when all staff pay was cut by up to 10 per­cent. Or, in­tro­duce flex­i­ble work ar­range­ments like part-time work, vol­un­tary leaves of ab­sence, or de­ferred com­pen­sa­tion in which an em­ployee can work full-time at 80 per­cent salary for sev­eral years be­fore tak­ing a paid sab­bat­i­cal.

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