Mass layoffs no easy task

Multi-layered approach helps with transition
By Martin Kingston
|Canadian HR Reporter|Last Updated: 04/07/2014

In April 2010, Automodular — a manufacturer of car parts based in Ajax, Ont. — was given bad news: A major customer was cancelling its contracts for sub-assembly and sequencing services as of September 2010.

As a result, the manufacturer would be forced to close a facility in Oshawa, Ont., and terminate most of the employees at that location — 70 unionized and 23 non-union workers.

Upon learning of the contract cancellation, the 650-employee company invited all employees to attend a town hall meeting where the decision was shared. HR also filed a notice of mass termination with the Ministry of Labour and subsequently posted the notice at the affected plant.

Automodular met with the union to finalize a closure agreement. As it turned out, the customer that had cancelled signed a new contract with a nearby company and Automodular’s union negotiated a continuance of employment for most of the unionized workers at the new operation beginning in September.

But that still left 23 non-unionized employees out of a job.

To keep the remaining employees motivated, the company made sure they were aware of their severance entitlements and other programs, such as awards and incentives for attendance and quality, along with co-chairing an employee adjustment committee for hourly workers and providing outplacement services for salaried employees.

In May 2010, Automodular hired Next Steps Canada to execute a two-stage outplacement and career transition program for the 23 salaried workers.

“Due to the size of our company and our commitment to our employees, we felt that it was the least we could do to help them move on. Many of them had been relatively senior and with the company since we started up. They were employees but all were also vested stakeholders in our company,” says John De Souza, director of human resources at Automodular.

“Part of our culture was respect for the individual and we could not see how we couldn’t do that. It just made sense, it was part of our company’s values and it was part of our belief in the people. It was the right thing to do.”

Challenges, solutions to overcome

The employees represented a wide array of working experience and included individuals ranging from a plant manager down to administrative staff. Employment tenure with Automodular ranged from four to 21 years.

Automodular was prepared to allow the workers significant time away during the regular working day to attend one-on-one advisor meetings and group workshops, as well as complete job interviews.

Next Steps devised a logistical plan in concert with the plant manager to accommodate the completion of the program without risking the efficiency of the plant’s operation and fulfillment of required production quotas.

Many factors and challenges were taken into consideration including:

•long-tenured, senior-level employees

•distrust between union and senior management

•a highly competitive job market

•staff working full-time while conducting a job search

•a stressful work environment as staffing numbers decreased while the workload remained constant or increased.

Assessment work was critical to employees in gaining a basic sense of key strengths, work styles and career preferences, as was realistic goal-setting and monitoring, a need for ongoing motivation and a high level of confidentiality and trust.

The outplacement program was executed in four main stages:

Orientation: Small group orientation sessions were conducted at an offsite facility and included:

•the introduction of outplacement advisors and the recruitment manager

•program and logistical details

•a discussion of the employee’s expectations

•completion of client authorization forms

•a review of the privacy and confidentiality policy.

Tier-one program: Each employee was assigned to an advisor, with one-on-one sessions covering career transition, self-administered assessments, resumé and letter writing, job search strategies, networking and interviewing.

They also were provided with customized workshops and given access to an online career management system with personal assessments, job site tools, company and industry research, and the opportunity to network job postings with LinkedIn contacts.

Recruitment assistance services: Peer companies involved in the automotive industry and other relevant companies operating in the region were contacted by the outplacement provider.

“Anything that would contribute towards an individual being successful in gaining employment was worth looking at,” says De Souza.

“The greater we could increase the odds of them gaining employment, we were game to do that, within reason.”

Tier-two program: Those workers who remained in the program after the plant closing were provided with six additional hours of personal job search review and coaching.

Additionally, all participating employees were offered a personal finance consultation workshop, discounts on training and development courses, and business cards.

In the end, 19 of the 23 employees found re-employment opportunities prior to the plant closure and four of them participated in the tier-two program, benefitting from continuing personalized consultation and career transition guidance with their advisor.

Martin Kingston is the Toronto-based managing partner of Next Steps Canada, an outplacement and career transitions firm. He can be reached at (416) 479-8208, or visit for more information.

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