How Human Resources Can Improve Employee Communication During Tough Economic Times

Research has shown that when downsizing takes place, employees remaining in your organization—the "survivors"—generally do not fare as well as those who are laid off or terminated. Higher turnover, higher absenteeism and more health problems can be expected from these survivors.

A layoff can also make it difficult for human resources and management to recruit highly-qualified employees, reduce employee engagement and willingness to take risks, reduce morale and cause loss of institutional memory.

So what can be done to ameliorate the effects of a layoff? There are several keys to nurturing your survivors. First and foremost is communication. As a representative in the human resources role you can have a profound impact on employees' perception of the layoff.

First off, human resources must encourage the executive team to communicate frequently and directly to employees at all levels. This sets the tone of how the layoff will be handled internally. Once first and middle-level management sees this action on the part of upper management, they will feel that it is safe to freely communicate with their subordinates.

If human resources is unable to stimulate the leadership into action, go to members of the leadership team with a list of questions the human resources department has received and ones that are anticipated. Provide the questions and answers to employees on internal Web sites, memos and to the entire management team for them to communicate with employees.

Human resources messages should include reasons for the layoff, corporate and division goals, and, most importantly, everyone’s part in the new organization. The subtle message this communication conveys is that there is no hidden agenda and that management cares about their employees and their concerns.

Research has also shown that employees' perception of justice during a layoff is extremely important. How well the employees understand the process by which individuals were picked to be terminated or a result of a layoff can have a huge impact on their sense of justice. Even if they do not like the outcome, if they have been shown that the process was fair, they will be able to come to terms with the situation.

Finally, does human resources have a workforce planning initiative in place? If not, consider using the organization’s vision to drive goals, which in turn can be used to craft a set of competencies that are relevant for all employees. An effort can then be made to determine the knowledge, skills and abilities (KSAs) required for all current and future job positions. This proactive effort will allow human resources to easily plan and create the selection and training processes.

While doing research for this article I was able to get the names of organizations that had recently closed, moved out of the area or downsized. Of those still open for business, it was difficult to get information and most failed to return phone calls. This indicates to me a fear of talking about the situation, although other factors could be involved. It is important to move through fear and remain as open and transparent as possible. This will give the employees, customers and shareholders confidence that human resources is dealing with the situation and not ignoring it.

Even if the organization is not downsizing during the economic crisis, communication remains a crucial corporate value. For example, Toyota maintains a commitment to long-term employment stability for their team members. In order to ensure that all employees understand all aspects of their business they ensure communications are:
  • Timely
  • Accurate
  • Factual
Recently Toyota and all other automobile manufacturers have had to reduce production or temporarily suspend some plant’s operations. Instead of conducting layoffs, Toyota has chosen to retain all employees and use this time to improve business operations, catch up on periodic training and add to their flexibility by training workers on additional jobs. Similar actions previously taken by Toyota have shown that their plants emerge from the downturns much stronger and poised with renewed vigor and strength once the economy begins rolling again. What is important is that all Toyota employees understand the culture and huge commitment the corporation has made.

So use your role to:
  • Facilitate frequent, frank, honest communication
  • Facilitate a sense of justice
  • Promote workforce planning
This article was adapted from an article in The Human Resource Magazine, Lexington, KY.