IT Employment optimize

What to do when you have to lay off staff

Layoffs are all over the news. Anyone who has ever experienced a layoff know all too well the pain involved. This column,however, is about the flip side of the layoff situation - having to be the one who has to decide who to layoff and then performing the unseemly deed.

I have been seeing that word quite a bit in the papers these days and frankly it bothers me. Having been the victim of a reduction in force, I know all too well the pain of sudden unemployment and all that can go with it. However this column is about the flip side of the layoff situation - having to be the one who has to decide who to layoff and then performing the unseemly deed.

Layoff from a manager's perspective is much more difficult than a firing - at least emotionally speaking. With a firing there usually is a justification that the person being fired is not performing up to standards or has done something to warrant termination. Not so with a layoff. The victim of a layoff generally has committed no crime other than to be less senior than others in the organization or perhaps more senior and earning more than his or her colleagues, or just bad luck. Because of this, there can be a sense of guilt on the manager's part when it comes to layoffs. I'm here to tell you that unless you had a strong hand in the performance of the organization - it's not your fault. I know that doesn't make it easier, but hopefully gives you a sense of perspective for your actions.

Another difficult aspect of layoffs is choosing who has to go. This is usually coupled with numerous exercises done in secrecy in which you have to determine layoffs based on a series of what if percentage budget cuts. How many do you have to lose if your budget was cut 5%, 10%, 15% or perhaps more? These exercises can eat away at you if you let them.

Then there is the "how in the world do they expect me to keep things running when we barely have enough staff as it is scenario?" This is usually accompanied by the "we have to do more with less" song and dance given by management who does not have a clue in the first place and thinks that everything can run just the way it is with fewer people. Having management that is insensitive to the fact that cuts in service need to go along with cuts in staffing can be particularly stressful. It may sound crazy, but I have gone through budget scenarios in the past where I have written myself out of the budget, leaving more staff in place to get the work done. This to me was more palatable than trying to manage an environment that clearly would not have enough human resources to perform meaningfully and the expectation that nothing was going to change.

So how do you choose who has to go? This can be very complex and not entirely under your control. Let's look at one of the more difficult scenarios - layoffs with "bumping." This usually occurs in an environment that has collective bargaining and involves senior people being laid off in higher-level positions and having the "right" to bump across to a position that has someone less senior in it or bump down into a lower-level position with someone in it - assuming they have the "qualifications" to meet the job requirements they are bumping into.

This type of exercise is a nightmare to perform and can take weeks or months to determine all the bumping paths that may exist. Worse still is the fact that depending on where the job functions of your unit sits in the organization, you may have to perform no layoffs but still end up with an entirely new staff through bumping. These new staff members are theoretically capable of doing the job they bumped into (at least according to Human Resources) and are "thrilled" to be there. This is one of those situations in which you have the least control over the final composition of your unit and the real lesson learned here is this: Make sure the job descriptions and qualifications for the jobs under your management accurately portray what it takes to get the job done. It will come back to haunt you if you let job descriptions get out of sync with reality and layoffs with bumping come around. BTW, it's usually too late to try to fix them once the bumping exercises have started as these will be seen as efforts to keep specific people in their jobs.

The next hardest layoff situation in my mind at least, is the general cut across the board scenario in which the cuts are spread evenly across the organization with little thought to how business gets done. In this situation you may end up having to cut less people but still be left with the expectation that nothing is going to change in regards to the work your unit gets done. This is in direct opposition to being able to say "We will no longer provide 24/7 coverage and thus we are cutting everyone that works midnight to 8:00 AM. Undoubtedly the second situation makes it clearer whom to cut and the consequences of those cuts than the first.

Obviously as a manager, your ultimate goal is to keep your operation running as smoothly and effectively as possible. I almost typed "your ultimate goal is to keep your best people" but that may not be realistic. Sometimes your best people are also your highest paid people. That would make sense right? Paying people for what they are worth? Yes, I realize that doesn't always happen - which is why I said sometimes. When you do happen to find yourself paying your best people more - you may have to choose between having a few good people or more average people. In these cases you will have to decide what gives your unit the best chance to succeed. I always feel that having fewer competent and hard working people is better than having lots of less competent employees, but there does come a tipping point in that equation. Sometimes it's better to have more bodies to throw at the work than to not have enough bodies at all. These are hard decisions.

Ultimately there is no cut-and-dried formula for determining who gets laid off. Office politics, senior management decision-making, self termination (people getting out on their own), seniority, and union bumping rules along with a plethora of other factors usually make each layoff situation unique unto itself. The only thing I can guarantee is that it is unpleasant, demoralizing, and no matter how hard you try the final result will leave you unsatisfied.

Having said all that, I do feel your pain. Laying people off comes with the territory if you want to be in management but that doesn't mean it doesn't take a toll on you. While the focus of the pain in a layoff is understandably with those who are losing their jobs, those who are left behind and those that are a part of the decision making suffer as well. It is in times like these that you must seek some solace. Do not be afraid to seek it from friends and loved ones, and talk out your feelings. Carrying this burden around by yourself is neither deserved nor healthy. Best of luck to any and all that find themselves on either side of the layoff table. May your difficulties be short lived and your situation turn positive as soon as possible.

22 comments
vincewattz
vincewattz

I have an assignment: I am the Human Resource Manager of a reputable commercial bank in Kenya having Branches across the country. After conducting the Human Resource Planning of my organization, I estimate that because of several technological innovations and changes, my bank will need 25% fewer employees 3 years . What action should I take today? Vincent Watitwa Email: vincewattz@gmail.com

juan_milano
juan_milano

Es un reportaje excelente.. de cierto modo eso sucede cuando existe algun tipo de crisis o se ve afectado alguno de los negocios de la empresa IT donde laboras, por otra parte de cierto modo tiene ciencia el tener que salir de personal que tiene mayor experiencia para ahorrar costos

cbulla
cbulla

I think its weird the article date is 06JAn09 and the comments are Feb08. Regarding layoffs. In FL there is little conscience to firing or laying someone off. The county I live in is 11th in the state for unemp the 11 of 12 months last year we led the nation in foreclosures. There were few jobs outside of 'service' type jobs to begin with and when stuff tanked, the service jobs went to. I have noticed that Career Builder for the 50 mile radius (weird thought since I live on a coast and its more like a half circle) has not had a *new* tech job posted to it in 7 weeks now. The same two companies, Wal-Mart and Chico's, with ads. One suffers from location (Wal-Mart's distro center is in the middle of nowhere) the other because the resume submission is a black hole where no tech I know of has ever had a call or reply back to their submission. Generally speaking, there is little loyalty to employees unless they've been there so long they've got a teflon coat. I've seen some fired in the morning with the replacement sitting in HR signing paperwork. What is most common here is the company just closes doors. Sometimes the employee's are on the front stoop on the last few days helping with the liquidation sale because thats part of their last pay check. One of the benefits of a recession like this is it cleans out the technical arena in the local area of the 'tech by proxy' types who are in it because they have some certs from some Tek Skool or Kollege Klass they took down the road but really possess no broad range of skills in the field to be employable, but know enough to be good reimage gophers and support Outlook. While layoffs suck, the returns can sometimes be beneficial to.

grephead
grephead

I often joke with my coworkers that we could outsource the executives and get the same poor decisions at 1/6 the price. Imagine the savings to a large corporation if that were done......

mike_patburgess
mike_patburgess

As I said before on this subject... The people who should be on the chopping block are the senior management.. Perspective check... they are the ones that might have put the company in this position and it is time for a change at the highest level. It is the small people who execute the objectives to the best of their ability. If the objectives are flawed, then the obvious choice to let someone go is the upper management.

reisen55
reisen55

Outsourcing and Reduction in Force is the best subject for IT Layoffs. It does not matter if you are good or bad, talented or lame. The Chairman of ACs, Lynn Blodgett has stated that if the job can be done by equally intelligent staff in Bangalore, then those cost savings are TOO GREAT TO IGNORE. IT staff in America is running damn scared because outsourcing is the corporate mantra and no emotional involvement is involved at all. I was working for a major insurance firm, in August of 2004 the entire IT group - everything - was outsourced to Computer Science Corporation. One year later, we were told that we had all met the service level agreements, we could be proud of that, we could be proud of what we had done for CSC and that we had 30 days termination notice. Thank you.

kingmail53
kingmail53

IT Management generally doesn't do much of a job at offering the business it serves a reasonable way to understand the services it delivers vs. the resources IT needs to deliver those services. The lack of connection between costs and service invites the business functions to micromange the IT business by cost category instead of facilitating a reasoned discussion around which of the services IT provides they no longer want to "buy." The business isn't responsible for controlling demand and expects IT to deliver whatever they want for a fixed cost. More than half of IT costs are bought hardware, software and telecommunications. Less than half of IT costs are labor. Cutting labor won't accompish what the business wants. Cutting labor without cutting services squeezes IT even more - for how long do we think we can "do more with less?" Now is the time for IT to start developing real IT service catalogs with a pricing model so that IT can have a reasoned discussion with business leadership about how best to cut IT costs so that the cuts are a diet, not an injury. If IT starts now, perhaps they can get this done by creation of the 2009 fiscal budget. Cary King www.MinervaE.com

The 'G-Man.'
The 'G-Man.'

Of editing a blog to make it look more "current" but forgetting about the date stamp. Poor show for a blogger if true.

richard.ots
richard.ots

I once gave a workshop on leadership for an MBA class. I had them make four groups with one leader per group, working on a relatively simple project with very tight deadlines. I would hand out "new developments" to the group leaders every now and then. At one point, I gave the group leaders the task to "dismiss half of your team within 15 seconds or you are fired". Guess what? All of them chose to sack half their project team, rather than stepping down and appointing a new leader. It simply didn't occur to them that it was a real option. Implicitly, they appear to think that the leader is more important than half the project team. Explains a lot, doesn't it?

mad8hawaiian
mad8hawaiian

Such an ugly word for those of us who do the right thing based on managements poor decisions. Why they chop off the arms and legs but leave the head is a whole new study in management.

Absolutely
Absolutely

that "layoffs" amount to blaming underlings for their superiors' decisions. I would like to see a weblog documenting some entry-level member of a workforce, successfully second-guessing an executive in the same company. I know, executives have access to privileged information, but if it's so easy to do their jobs, that shouldn't be a problem. Right?

AlphaW
AlphaW

Every time I see some article on some hot shot CIO or CFO the first thing they seem to do when they go into a company is outsource everything IT related. At some point their jobs will get outsourced and then it will be too late.

reisen55
reisen55

Since when in the past 10 years has our little community EVER been job secure since American management discovered the utter fiction of Bangalore, outsourced labor, lower health care benefits all to do our jobs "cheaper,faster,better" (one word to me) and of course increase shareholder value? We can do OUR LEVEL BEST and be as smart as we can. Lynn Blodgett of ACS said that the economies in outsourced staff are JUST TOO GREAT TO DISMISS. Period, end of American IT. Layoffs are not new to us at all. We've been killing ourselves for years only to have management back-hand our efforts, shove us out the door with little or no severance pay. Outsourcing is treason pure and simple and has destroyed youthful enthusiasm for IT as a practical career.

Absolutely
Absolutely

kingmail53: [i]Now is the time for IT to start developing real IT service catalogs with a pricing model so that IT can have a reasoned discussion with business leadership about how best to cut IT costs so that the cuts are a diet, not an injury. If IT starts now, perhaps they can get this done by creation of the 2009 fiscal budget.[/i] I have never encountered the term "IT service catalog" before, but the concept has obvious merits. The biggest obstacle, as I perceive it, is that the workforce is more modular than the hardware & software, both in function & price.

JamesRL
JamesRL

I managed a staff of 30 people and had a budget of 2.5 million. Once you buy equipment, you capitalize it by spreading the cost over X years (depending on your country's tax laws). Once it is purchased, you can't lay it off. You might do consolidation and sell it used, but you won't get what you paid for it. Telecom is another somewhat fixed cost - the contracts are multi year and fixed. But labor costs are more variable. If you have to save money now, you can postpone buying equipement, but your real savings are in labor. And yes, I've been laid off too. James

Tony Hopkinson
Tony Hopkinson

IT or any other dept that doesn't stay aligned to the business ( a subjective judgement at best I might add) simply leaves more gaps in your armour. You could be tightly aligned to business function and at a manning minimum, you'll still have to cut costs and your people are never assets in this scenario.

juan_milano
juan_milano

what you mean? thanks you in spanish? is "gracias"

Dr Dij
Dr Dij

then we can just MAKE UP ANOTHER! 'Personnel Ability Redeployment' 'Rightsizing' 'expense reduction' 'competancy reduction' 'useless buzzword creation' 'hiding the real meaning'

cupcake
cupcake

and that bottom line is that it means you're not working... so no matter what kitschy word you invent doesn't mean much. Still sucks.

reisen55
reisen55

My favorites are ones that sound progressive but are regressive. Resturcturing the Enterprise. (Used by an insurance firm to fire people) Transformation (used by the same company to fire people) But outsourcing remains my favorite. I did not believe I would be fired when my employer was moved from the insurance company above to CSC. I was TOO VITAL to be fired. Nope. Cheaper, faster, better, just make phone call to Bangalore and have your Windows problem fixed. More expensive, slower, worse.