Employees shaken by downsizing tremors

By Lesley Young
|Canadian HR Reporter|Last Updated: 04/12/2001

Canadian organizations are entering the new century grappling with change management initiatives, research shows. While tales of merger mania dominate the headlines, the downsizing that is still occurring seems to have dropped from view, cloaking the reality that many employees are struggling with the effects of change.

The WorkCanada survey by Watson Wyatt shows more organizations underwent downsizing in the past year than those that grew (see chart). Only eight per cent of the 1,604 Canadian employees surveyed said they experienced no change last year.

And employees who experienced acquisitions, growth or mergers said they felt their organizations did a better job at handling change than those who experienced more negative activities, such as downsizing. While the finding is no surprise, the issue is that downsizing — a word that really came into its own in the late 1980s and early 1990s — is perceived differently in the New Economy, say consultants.

“When downsizing takes place when there is more buoyant job market, organizations are seen as less villainous than when its done in times of tough financial markets. It’s less of an affront to people’s values,” said Laura Dunne, senior consultant with Sibson & Company, based in Toronto.

There can be a tendency for companies to commit less attention and resources to downsizing than they commit to ensure smooth change during mergers and acquisitions.

“The guilt-factor is not there. Downsizing is no longer an anomaly, it’s a rite of passage for companies. I mean who hasn’t heard of someone whose been ‘downsized,’” said Colleen Clarke, a Toronto-based career consultant and executive director of E.A.R.N., a group for unemployed mid- to senior-level managers.

“There is no shame in it at all anymore and often companies use downsizing to get rid of the deadwood.”

Organizations need to handle downsizing well, if only to ensure the “survivors” maintain trust in organizations, especially when there is such a lush job market out there, said Dunne. “You need to re-engage them in the vision of the company. You need to let them know they have their jobs, their roles are important and how their career opportunities will be impacted.

“Organizations do the downsizing and think they are done. But they forget the individuals who are left. Their trust is shaken.”

Dunne said that while organizations are getting better at providing “crystal clear” communication and following up with immediate action during times of change, they are not coaching front-line managers to deal with concerns of staff. Front-line managers are the link to decision-makers, and if employees feel they are out-of-touch or uninformed, anxieties can swell, she added.

“You never know if you may need people back,” said Teri Brown, national director, Growth and Development with Watson Wyatt.

She said successful change initiatives, be they downsizing or mergers, require organizations to communicate well with employees and to have a plan at the outset. “Organizations need to focus on three or four goals otherwise you get too bogged down in the weeds and don’t see where to go if you want to make progress. Everybody should be given a road map.

“And it’s valid for an organization not to have the new organizational structure down pat. But they should know how the process will work. And early on, they should name a process team,” she added.

Also, know the skills and talent you will need in the future, and build succession planning and training development in light of what the future company will look like, added Brown.

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