In the movie Up In The Air, George Clooney's character fires people with abandon.
Barely a day goes by without another story of impending job losses. Tens of thousands of potential job losses have been mooted in the past month alone, although that is surely inflated by industry bodies or unions exaggerating job cuts to pressure the federal government.
Then there’s job losses that happen quietly; the well-paid professional who gets axed but does not apply for unemployment benefits or show up in official statistics. And the entrepreneurs who pride themselves on “hiring slowly, firing quickly,” sharpening their axes as markets slow.
I wonder how companies will handle the process of firing these people this year.
Will they make an already tough situation even worse through poorly planned and executed forced or voluntary redundancy programs? Will they turn someone who was once an asset into a liability who bad-mouths the company at every chance? Will they show some sort or heart or be ruthless?
What’s your view?
- What mistakes do companies make when firing employees?
- Have you experienced a job loss that was made worse through the process itself?
- What can companies do to improve an already difficult situation with redundancies?
I like the approach where those who resign or are sacked leave the building that day. Yes, it’s brutal, but the employee gets a few weeks of “gardening leave” and the company minimises the risk of the employee stealing clients or other assets, or demoralising staff. This strategy does not work in all companies, but is worth considering in some.
Here are typical mistakes companies make when firing staff. Add your views to this blog.
1. The faceless men
I understand companies hiring consultants during large-scale redundancy programs or where there is hostility and legal risks. But is there anything worse than having to deal with an unknown corporate downsizing person? It truly is like that movie Up in The Air, where George Clooney's character fires people with little remorse. Good managers should lead the job-loss process, not outsource most of it to others.
2. It takes too long
I never understand companies who have disgruntled staff hanging around the office for weeks as they serve out the official notice period. There’s nothing worse than staff who are leaving upsetting those who stay by being difficult. Fast-growing entrepreneurial ventures are almost always better off letting axed staff, or those who choose to leave, do so sooner rather than later.
3. No way, Jose
Have you heard those dreadful stories about banks asking fired workers to train their replacements before they leave? What a hide. Or companies that expect departing staff to provide their contacts, ideas or other assets before leaving. Yes, staff who have a notice period should do their job. But making unreasonable, insensitive demands of departing staff is a sure-fire way to inflame an already heated situation.
4. Forget about the rest
From experience, those who keep their jobs during redundancy programs are sometimes more stressed then those who lose them. They miss their colleagues and friends, and usually have to do more work for no more pay. They may also be bitter at missing out on a payout, or demoralised by constant moaning from departing workers. Yet nearly all the attention is on those leaving.
5. No send-off
I was once involved in a large voluntary redundancy program (for the size of the business unit) and organised a send-off for several departing workers. It was tempting not to, but the send-offs were as much about those who stayed as those who left. Hopefully it showed the company valued its employees, even those who decided to leave as the organisation’s strategy changed. How many companies let long-term employees go with barely a ‘thank you’ on the way out?
6. No alumni
I’m shocked at how few companies have genuine alumini programs for former staff. It seems a no-brainer to encourage past staff to have some connection with their company, even if they are forced out. I still get invited to events from my first employer, a global management consulting firm. It builds goodwill, helps the company win new work, and seems like the right thing to do.
7. No follow-up
The best managers always seem to check on staff after they leave. It may be as simple as a quick phone call or email, a coffee, or offering to be a referee. The bad managers make staff feel they have been erased from corporate memory once they leave. It’s a stupid approach.
8. Poor asset protection
How many employees leave with hard company assets such as computer equipment, and soft assets such as client lists, intellectual property or company secrets? How many companies fail to inform departing staff of their obligations when they leave, such as no-competing clauses in contracts and the like?
9. Legal risks
I have seen too many start-up entrepreneurial ventures come unstuck when staff are fired abruptly. Poor systems meant staff were not paid all their superannuation, leave was not properly recorded, or other contract obligations or promises were not fulfilled. Or there were no performance reviews, job descriptions, or a clear basis for termination. It gets even more complicated when equity is involved. Build reasonable people-management systems before hiring or firing staff.
Follow MySmallBusiness on Twitter @MySmallBusiness
27 comments so far
More comments
New user? Sign up
Make a comment
You are logged in as [Logout]
All information entered below may be published.
Thank you
Your comment has been submitted for approval.
Comments are moderated and are generally published if they are on-topic and not abusive.