My CEO Life

The cold hard reality of life for all businesses is that, from time to time, people need to be let go.

Recently i chatted with one person that was made redundant.  Her description of the process was “I was notified I was being made redundant, and immediately frog-marched out of the building. I wasn’t even given the opportunity to collect my wedding photos off my desk. It was all rather disrespectful.”

The above is an example of a company that is not approaching the letting go of people in the right manner.  How should companies handle this most difficult of times?

Companies (and more importantly their HR managers) need to remember that they are dealing with people and that letting someone go, no only impacts the life of the employee but also the employee’s family. Therefore, how people are fired is often just as important as making the decision to get rid of them in the first place.  This is often forgotten in the rush to move them out of the business and often firing people becomes no more than a process that HR follows.

There are costs associated with firing people.  The obvious is the payout  the employee is entitled to.  However, there are often hidden costs and how you let someone go can impact the size and impact of these costs.

The first is the decreased productivity as people around the business spend time talking about who has gone and how they were treated.  If the process is not clear, these people also spend time looking for other jobs believing they may be next.

The second is the external cost in future recruiting.  People talk and disgruntled ex-employees talk alot.  People get to know how a company treats its employees and they often think twice before signing up to work for that company, thus increasing the future cost of employment.

Therefore, there are some simple things a company can do to make the process easier all round.

• Have an open and honest discussion with the employee and to make sure that they understand what is happening and why it is happening.
• If mulitple employees are being let go, do it all at once – dont spread it out – and communicate clearly.
• Treat them with respect during the process rather than just walk them out the door.  They are not criminals.

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