Target hits mark with severance fund
Failed retailer criticized for handling of closure, fact that some staff heard about decision through media
Jan 27, 2015
By Todd Humber
There is no good way to lay off an employee.
Target has taken lumps, on social media and in the mainstream media, for being too callous with the handling of its announcement that it was pulling out of Canada. Critics have derided the failed retailer because some employees apparently found out about the closure through the media.
But when you have more than 17,000 people on the payroll, and an announcement that is going to make national and international headlines the moment it is leaked, that’s a near impossible task.
Not to absolve Target for its sins — but rather to view it as understandable in the context of a massive closure.
In 2013, Best Buy and Future Shop experienced similar pains and public backlash when it decided to close 15 stores across Canada.
In an exclusive commentary written for Canadian HR Reporter, Janice Antaya-Finlayson, vice-president of HR at Best Buy, and Chris Taylor, vice-president of HR at Future Shop, wrote about the decision not to give employees advance notice of the loss of their jobs.
“The most prevalent criticism we received was we didn’t give employees advance notice of the closures,” they wrote in the April 8, 2013 issue. “We considered this option but decided against it because we felt it unfair to ask employees to focus on providing top-level customer service while their imminent job loss loomed overhead.”
That’s a luxury Target doesn’t have — Future Shop and Best Buy were just shuttering a handful of stores and remain a going concern. Target, on the other hand, is completely shutting down all operations in Canada.
But Target did do something very interesting and noteworthy from an HR perspective by setting up an employee trust, with an infusion of roughly $70 million in cash from its operations in the United States, to cover severance payments for workers.
The money should ensure that every worker receives full severance without having to jockey amongst all the other creditors who are owed money by Target. That’s not insignificant, and perhaps could serve as a blueprint for other organizations to follow should a similar fate befall them. It also means some employees will get more than the statutory minimums required for severance, something not insignificant in this kind of business disaster.
Target has also been criticized for providing working notice rather than just cutting employees loose with a package.
But that, too, is a reality that is becoming more common — and it’s something we plan on exploring more in a future issue. A couple of employment lawyers I spoke with said more organizations seem to be using working notice. It can be appealing — it could reduce the reasonable notice amount if the worker finds another job, and it also gives the employer work for its money.
It also carries plenty of risk in terms of morale and sabotage — but those are two things Target isn’t really worried about for its Canadian operations.
Attend a conference: You won’t regret it
As I write this, I’m back in the office for the first time after attending the three-day Human Resources Professionals Association (HRPA) annual conference in Toronto.
I always feel rejuvenated and reinvigorated after attending conferences.
It’s always great to get out of the office and talk face-to-face with our readers and HR professionals, and to attend sessions to find out the latest and greatest advice when it comes to tackling workplace challenges.
It can be hard to find time — and budget — these days to get out of the office and attend conferences like this, but it’s time you’ll rarely regret taking.
HR professionals are often the internal champions for the importance of professional development, but they shouldn’t forget about their own careers and need for learning.
While Ontario’s big annual conference has passed for 2015, professionals in other parts of the country still have time to sign up and attend conferences put on by their provincial associations, such as the Human Resource Management Association (HRMA) in B.C. or the Human Resources Institute of Alberta — they’re both holding their annual conferences in April. If you’ve never gone, I encourage you to give it a shot.
And if you’re in Ontario, it’s never too late to start planning for 2016.
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Todd Humber is the publisher and editor-in-chief of Canadian HR Reporter, the national journal of human resource management. Follow him on Twitter @ToddHumber