Call it the downsizing one-two step. It's a predictable approach to the difficult problem of layoffs. First the CEO announces the bad news - the downsizing. That's one. Then, two, a quick shift into predictions of good times just around the bend.
There's just one problem: The vast majority of downsizing campaigns fail to meet their objectives. "Seventy-five percent of companies expect productivity gains, but only 25 percent achieve them," says management consultant Bob Turknett. Why? It's hard to eke more productivity out of demoralized and unhappy layoff survivors.
Huh? Isn't it enough for the remaining employees to have their jobs? Shouldn't that keep them happy? If ever there were a universal delusion among top executives, you just read it. Human resources experts are united in saying that post-downsizing, organizations have to take special steps to soothe and motivate employees, or watch employee morale tumble off the map. "Many organizations are so focused on the short-term boost to the bottom line that downsizing produces, they forget the potholes that await them down the road," says Nancy Kaylor, a workplace analyst.
Understand, none of this is academic. We're in the midst of a tidal wave of reductions in force expected to continue even as the economy improves. American industry sliced away almost 2 million jobs in 2001, according to Chicago outplacement firm Challenger, Gray & Christmas, and in early 2002 the pace continued. But despite all this practice, senior executives still fumble this mission because they aren't taking some basic steps, says Jim Mooney, vice president of consulting at Farr Associates in North Carolina.
Exactly what does a smart company do to handle the post-downsizing workforce? Follow the steps below, and you'll be on the right track.