Jeff Judy

Jeff's Thoughts - July 15 , 2015

Don’t Let the Door Hit You on Your Way Out!

Several years ago I watched an organization almost implode. New management took over with (they believed) great ideas on how to increase revenue by streamlining and outsourcing several processes.

Part of this streamlining meant letting some people go, and the new leadership gave very little thought about how to do that. They gave their employees no clear understanding of where the organization was going, no heads up the lay-offs were coming, and no consideration as they moved people out the door. To make matters worse, they allowed workloads to balloon with almost no discussion of fit when making work assignments, and without providing training to help employees be successful with their new responsibilities.

The first two years after taking the business over, the new owners achieved several of their financial targets. They were happy that they had “right sized” the organization and improved efficiency. One variable they didn’t track was turnover. As their profits increased, so did their turnover. People were always waiting for the “other shoe to drop.” Their best people all started to leave, and after a couple of years of the new regime, I got a call from their HR saying they needed help. They couldn’t find people who wanted to come work for them.

Your organization may have had to let people go in recent years, with the downturn. Now, you may have people jumping ship because the economy is better and they see opportunities elsewhere.

In either case, how you manage your people during change says a lot about your organization. Your ability to keep your best staff and to attract good additional employees are impacted by your reputation for how you treat people on their way out.

And as mergers and acquisitions heat up again, a common outcome is centralizing redundant services and eliminating positions. Technology, too, can impact head count in some functions.

Letting people go is uncomfortable. So is losing good people, people you really wanted  to keep. In your haste to get the process over with, it is easy to botch the job.

I often tell my clients that the way you treat your employees on their way out of the organization says a lot to those who remain. They are watching every move you make during this process – and learning.

When people are treated poorly on the way out the door, a bit of goodwill, of morale, goes out the door with them. People stand around and gossip. They spend more time updating their resumes and on-line profiles, networking and looking on the internet for other job opportunities. Imagine the lost productivity if after a poorly managed departure each remaining employee spends an hour a day, for a couple of weeks, thinking about or looking for a different job. At a time when you need people to do more, they are probably doing less.

If, after a merger or acquisition, the "survivors" don’t like how they see people being treated on the way out, do you really think your best employees are going to sit around and wait to be next? Those are the people you are going to lose first.

On the flipside, if you treat people with respect on the way out the door, you might have better odds of keeping good people on board and productive. Organizations that provide outplacement services, severance pay, skills training, and even advance notice of potential lay-offs are likely to see a much less severe dip in productivity and morale by the employees who stay. Yes it is harder, and more costly at the start, but in the long-term, you build trust with your employees and reduce the potentially painful loss of productivity and customer service.

As for the people who leave you, who take a position elsewhere, well, that's a "painful business decision", too. In today's labor market, many feel that their companies demand loyalty from employees, without being loyal in return. When you treat people who are leaving with dignity and respect, you show some of  that loyalty. When you treat people poorly as they go out the door, you reinforce an "us vs. them" vision of management-employee relations among your remaining staff.

Whatever the reason for employee departures, communication is key. If you don’t tell people what is going on during a change they will make up their own stories. Trust me, the stories they make up tend to be worse than reality.

An employee's departure, whether it's their decision or your decision, is a window into the values of the organization. It tells the employees who remain whether your stated values about relationships with employees are real, or lip service.

And over the long haul, the handling of these departures impacts your ability to attract and retain the best employees. Getting this right is simply good for your business.


More About Nan Gesche

Nan Gesche helps bank staff play well together. She has seen banking from almost every possible perspective, from leading the training function for a bank holding company to her post as a bank examiner to her current consulting activities in the areas of communication, change, and organizational effectiveness. If you need coaching or facilitation to translate your values into action, contact Nan at nan@nangesche.com. You can learn more about Nan at the Associates page on my web site, or at Nan's own site at www.nangesche.com.