HR leaders talk

Terminating workers

When business declines, organizations respond by cutting costs and often cutting head count. Canadian HR Reporter sat down with five senior HR professionals to talk about the painful task of letting workers go in a tough economy and some of the tactics they use to make it easier for themselves, the worker being terminated and the employees who survive.


Cerys de Freitas
Vice-president, human resources
Research Strategy Group

A full-service market research firm in Toronto with 18 employees that conducts qualitative and quantitative surveys.

Human resources may be all about people but, when it comes to letting workers go, it’s better to focus on jobs and positions instead of individual workers, says Cerys de Freitas, vice-president of HR at Research Strategy Group in Toronto.

“I personally try to turn off all emotions until after,” she says. “I know it sounds very cold but I have to because I am quite an emotionally based person. So I try to look at it that this as a business decision — it doesn’t have anything to do with the individual people.”

Unfortunately, letting people go is an exercise Research Strategy Group had to go through just last month. The company fought hard in the face of the recession — cutting overhead where possible, negotiating better deals with suppliers, instituting hiring freezes and trying to drum up new business. But the numbers just weren’t adding up.

“Our goal was to avoid layoffs wherever possible, but we exhausted all the other possibilities,” says de Freitas.

The company considered numerous alternatives to cutbacks. It offered sabbaticals and leaves of absence, which helped delay the layoffs somewhat. If anything, the company held on to workers a little bit longer than was justified, she says.

“We take a lot of pride in our people,” she says. “It wasn’t easy but we simply had too many people. It wasn’t sustainable.”

The company is very transparent with employees when it comes to the health of the books. That worked in the company’s favour because the cuts didn’t come completely out of left field.

“They were somewhat prepared beforehand. They could see that one plus one equals two,” says de Freitas.

Immediately after the layoffs, the company met with the employees who had survived the cuts to clearly communicate the reasons behind the decision. Because it’s a smaller company, it was easy for everyone to be in one room for a debrief.

“It was important to talk to everyone on the same day, so that we could just say, ‘You know that this is it. You’re not next,’” she says. “We reassured them that we’re on the road to recovery and that we waited a long time before making that decision.”

The company also told employees that management’s doors were open and everyone should feel free to come in and discuss any concerns.

De Freitas admits letting people go takes a personal toll on HR professionals. But it’s part of the job and she thinks it’s critical for HR to be present when delivering the bad news.

“It would almost be offensive not to be there,” she says. “I am there from the beginning when they are hired, and throughout the entire process. So to not be there in the end, it would be wrong.”

There are things HR professionals can do to ease the burden on themselves and other managers who have to deliver the bad news: focus on the numbers instead of the individual people; make sure the decisions are made on real criteria such as seniority, productivity and quality of work, and ensure they are applied consistently; and remember the decision isn’t personal.

“It’s the best one for the company and the best for the remaining employees,” she says. “If it’s a fair decision, it makes it a little bit easier. Keep busy with the facts and turn off the emotions. After it’s over, there is a huge emotional impact. But, being in a position where you’re a leader, you can’t shirk that. But you have to deal with it on your personal time.”

When dealing with a terminated worker, it’s all about remaining professional without losing empathy. HR professionals need to get right to the point, being gentle but firm.

“It’s a hard thing for them to hear and process. There will be anger and shock and anxiety involved,” she says.

Workers will often try and start talking about ways they can stay, or alternatives, but HR professionals need to stick to the script — discussing nothing but the package being offered.

“It’s not open for discussion,” she says. “Opening that door will lead you down a path you don’t want to go, and could leave you open to legal problems.”

HR should explain the decision, without apologizing for it, and go through the package step-by-step ensuring the employee understands the details. It should be a brief meeting and the employee should always be thanked at the end, she says.


Chris Beatty
Director of human resources
Graycon Group

Calgary-based IT consulting firm with 105 employees.

Terminating employees is never easy but there are things HR can do to make the process smoother for everyone involved, according to Chris Beatty, director of HR for Graycon Group in Calgary.

The IT consulting firm recently had to lay off nine workers — about seven per cent of its workforce — because of the effects of the economic downturn. Beatty, who has been in HR for about nine years, says there are a few things he does personally to mentally prepare for a meeting with a worker who is being let go.

“I’ve done it for long enough now that I know the feelings that are going to be coming,” he says. “I know that I’m going to be anxious about things and I accept that anxiety.”

He does as much work ahead of time as possible — getting paperwork ready and setting up the meeting so everything runs smoothly. He also gives himself additional space and time to mentally prepare.

Because Graycon is a relatively small employer, Beatty knows the workers and has a good sense of how they’re going to react to the bad news. The company takes security measures to make sure all the bases are covered in case something unexpected happens.

“We don’t anticipate it but you sort of learn over time to expect the unexpected,” he says. “I work closely with staff here, so I know each individual and I tend to have a sense of how that meeting is going to go. But I never go in expecting it to turn out a certain way.”

It’s “incredibly important” for HR to be in the room during a termination, he says. That’s because HR professionals understand the legal ramifications better than managers and can ensure the conversation doesn’t head in a direction that is detrimental to either the employee or the company.

“We’re also there to advocate for the employees’ rights and make sure they’re aware of what their rights are and encourage them to seek legal counsel,” he says. “I’m not sure managers would typically be as cognizant to do that. Not that they wouldn’t want to, but I’m not sure it’s top of mind for them.”

For the employees still on the payroll, the company starts its planning process long before the bad news is delivered. That way, the company can leap into action as soon as the terminations are announced.

“We’ve got to be out before the rumour mill starts,” he says. “When we finish that last meeting of the day, that communication comes out instantly.”

A factual message comes from HR, followed by a more candid message from the company’s president that explains the company’s strategy.

“Our strategy is about making sure information is coming from management,” he says. “Anytime there is a vacuum or a void in that communication, people are going to be left to their own devices to come to their own conclusion about what the state of the organization is all about.”

Managers also get teams together to talk one on one, he says. And it’s important not to forget about workers who are not in the office when communicating the news.

Beatty is proud of how the company handled the communication regarding the difficult decision to downsize. One thing he learned is the initial communication to workers isn’t enough.

“It’s not just all about that initial communication point, but it’s recognizing that this is a sensitive time and in times like that it’s all about repetition in terms of communications and making sure it’s a candid message.”

Layoffs were the last resort for the company, which tried numerous ways to avoid cutting positions. It offered reduced workweeks, which some employees took advantage of.

“We hoped there would perhaps be a little more natural attrition that would take care of the situation, but that wasn’t the case for us,” he says.

A salary freeze and a bonus freeze were also implemented, and senior management took a pay cut.

“Our strategy here was to ensure that we took the burden and we went as far as we could in making sure that we were taking the hit before anyone else took the hit, that’s for sure,” says Beatty.

All of that helped lay the groundwork to show employees the company had turned every stone to look for cost savings before laying off staff, he says.

“I think they were much more understanding of the situation,” he says. “It’s never a good situation and I don’t think there’s ever going to be a way to make it a good situation. The only thing you can do is communicate and hope that people understand where you’re coming from and they buy into what you’re trying to do as an organization.”


Cindy McArthur
Director of human resources
Hamilton Health Sciences

Six hospitals make up Hamilton Health Sciences in Hamilton. With 11,200 employees, it is the city’s largest employer.

Last year, Hamilton Health Sciences (HHS) had to cut $25 million from its operating budget. In an attempt to avoid layoffs, the executive team first looked at all non-labour costs and had all departments brainstorm on how they could reduce discretionary spending, says Cindy McArthur, director of HR at HHS.

“We went through a very rigorous process,” says McArthur.

Employees were also engaged in the process through a program called CURE — Can U Reduce Expenses.

Some departments were able to implement reduced workweeks and fewer staff were given BlackBerrys. Other departments identified and streamlined redundancies in services and efforts, she says.

But, at the end of the day, labour makes up two-thirds of the nearly $1-billion operating budget and layoffs were the only way to meet the savings target, she says. In January, HHS gave notice to about 200 staff across most employee groups.

The executive team took an active role in communicating the layoffs, and the reasons behind them, to all internal and external stakeholders and were available to staff who had questions about the layoffs, says McArthur.

The HR department developed guiding principles to help the executive team and senior leadership through the process, such as explaining the need to balance the budget, ensuring the process was open and transparent, acting in a caring way, minimizing the impact on employees and looking at vacancies to see if staff could be reassigned instead.

HR met with the senior leadership team all at once to ensure they understood the situation and the process, which varied between unionized and non-unionized employees, says McArthur.

“I wanted to make sure we were all on the same page,” she says. “The senior leadership team right down to the front-line managers needed to understand why we were doing this.”

HR learned several years ago, after a similar round of layoffs, managers needed help discussing layoffs with employees. So the organizational development team developed a tool kit for the leadership team that includes a framework to help managers have that difficult discussion, she says. This included scripts and frequently asked questions so the managers are prepared and informed.

“A staff member could turn to their manager and feel fully informed, engaged and have the right information available to them to ensure they understood why we were going through these processes,” says McArthur.

The organizational development team also developed a two-hour workshop for all managers, Dealing with the People Side of Change, to help them support employees.

“The manager has the greatest impact on an employee throughout the process,” she says.

While it’s important to ensure all legislative and collective bargaining requirements are met during layoffs, it’s equally important to focus on ensuring the employees left behind are well supported, says McArthur.

“There needs to be equal time and attention to the strategies to repair and support the workforce going forward.”

From research done by the HR team before the layoffs, McArthur learned 87 per cent of employees who have survived layoffs are less likely to recommend their organization as a good place to work, 77 per cent make mistakes on the job because of a lack of focus and there is an increase in absenteeism.

To support affected employees and those left behind, HHS brought the employee assistance program (EAP) provider on-site to provide counselling and a safe place for employees to vent or grieve, says McArthur.

A representative from Service Canada also came on-site to talk about how to apply for employment insurance and HHS brought in career counsellors and provided workspaces to laid-off employees so they could use computers to conduct job searches.

“We wanted to make sure they had those sorts of supportive elements in place,” she says. “We threw out all the feelers we could to see what could we bring in-house to help us through this.”

Employees were also given access to financial planners and pension plan representatives so they could figure out if they could afford to take early retirement packages or how to make ends meet while looking for another job.


Raji Ramanan
Director of organizational development
Lafarge North America — cement division

The cement manufacturing division of Lafarge North America, a construction materials manufacturer, has its Canadian headquarters in Calgary and employs about 1,200 people.

In the past year, the cement division of construction materials manufacturer Lafarge North America has had to lay off about 100 employees, including a plant closure, says Raji Ramanan, director of organizational development.

But thanks in large part to HR’s preparation work, the layoffs have gone smoothly, she says.

“We haven’t had any issues,” says Ramanan. “It’s been very seamless.”

Most of the responsibility for carrying out and communicating the layoffs falls to the vice-president of manufacturing for the affected business unit, the plant manager and the plant leadership team, but HR helps get them ready beforehand.

This preparation work includes talking with the unions so they understand the need for the layoffs and advising the managers on how to deal with the layoffs, such as being sensitive to employee emotions and communicating information to employees as soon as possible so they don’t turn to other, less reliable sources, says Ramanan.

“We started talking about it way ahead of time, preparing people ahead of time and keeping them in touch with the reality of the downturn,” she says.

The cement division implemented reduced workweeks and didn’t hire as many outside contractors in an effort to cut costs and prevent layoffs.

But once the organization realized layoffs were the only option, those affected were informed immediately so they could be prepared.

“That was something they really appreciated,” says Ramanan.

While layoffs are traumatic for those who lose their jobs, they’re also hard on the ones left behind who must continue to do the same work with fewer people. To help ease the transition for these employees, HR worked with managers to look at how jobs could be done with fewer people and which parts of the job were essential and which could be relinquished, says Ramanan.

Lafarge also brought in the EAP provider and private consultants to provide on-site counselling for employees.

Some of the layoffs were only temporary and every single employee who was asked back returned. Ramanan credits this in part to the company providing a program to bridge health-benefit costs, which boosted employee loyalty because they felt Lafarge cared about their well-being.

The way in which managers handled the experience — with respect and dignity — also helped boost employee loyalty, for those who stayed and those laid off, says Ramanan.

“We coached (managers) to approach it as a trust-building exercise rather than a head-cutting exercise,” she says.

During a downturn, production pressure is lessened so managers have the time to explain the situation to employees and have an open and frank dialogue, says Ramanan.

“A downturn is a good time to build relationships,” she says. “Make use of this time to build trust.”

Ciabh McEvenue

Managing director Tamm Communications

This full-service advertising agency, which specializes in recruitment marketing and employer branding, is based in Toronto and has 20 full-time employees.

Earlier this year, Tamm Communications, which has 20 full-time employees, had to lay off three employees. For the small, collaborative advertising agency, even a few layoffs have a large impact.

“We work in tight groups. There’s nobody who isn’t integral,” says Ciabh McEvenue, managing director of Tamm Communications.

There are no formal departments in the agency and all employees work together on different projects.

“We’re all in each other’s pockets,” says McEvenue, who is also responsible for all high-level HR decisions. “It’s like losing a sibling.”

Even though the economy started to stall at the end of last year, January was still a very busy month for the agency. The bottom dropped out in February and then March was even worse, says McEvenue.

“We kind of thought we were going to get away with it because it didn’t hit us until much later,” she says.

Once the leadership team realized the downturn wasn’t a temporary blip, they asked the staff, who all participate in the employee share ownership plan, what they would be willing to do to save costs and stave off layoffs.

All staff, from management on down, took a pay cut and one person reduced her workweek to three days. Another employee accepted a job elsewhere and the agency let her continue working until that position started so she wouldn’t lose her income. The agency also drastically cut discretionary spending on cleaning services, coffee services and supplies.

In the end, there just weren’t enough savings and layoffs were inevitable, says McEvenue.

“We had a hard time even uttering the word ‘layoffs,’” she says. “It was the first time we ever had to do layoffs. So there was a bit of a learning curve.”

Choosing who to let go of was extremely difficult. “We couldn’t really spare anyone and still grow the way we wanted to,” says McEvenue.

But eventually a decision was made and three employees were let go. McEvenue told them individually and gave them each a package that was above and beyond legislative requirements.

Afterward, the employees were allowed to use the agency’s resources for their job search and outside HR support was brought in to help them with their searches and to deal with the emotional ramifications of the layoff.

McEvenue and the management team also held a long, all-employee staff meeting to explain exactly what had happened and why.

“We try to be extremely transparent,” she says.

They made it clear the employees had been laid off through no fault of their own and they would be rehired as soon as the agency was financially able to do so. Tamm Communications has already rehired one of the employees and the other two have found other employment, says McEvenue.

The management team also stressed the laid-off employees could, and should, still be included in the agency’s social activities, which are a big part of employees’ social lives, says McEvenue.

“I’ve been in some organizations where if someone is laid off, it’s like they were dead,” she says.

That kind of attitude, along with the common HR practice of letting people go behind closed doors and then quickly ushering them off the premises, leaves laid off employees with the feeling they were cut because they weren’t good enough, says McEvenue.

“It’s protocol and there’s a reason for that, but it takes their entire contribution to the organization and relegates it to garbage,” she says.

McEvenue would like to see more organizations handle layoffs like a retirement. The organization could arrange a reception for the workers and their managers and give them a chance to support each other, she says.

Doing a poor job with layoffs will only hurt an organization’s brand and make it harder to recruit once the economy turns around.

“You’re hurting your brand, you’re hurting all of your marketing, you’re hurting the efforts of your entire business focus when you do things in a cowardly way. There’s no shame in the circumstance but there’s a lot of shame in getting the people out the door and then turning your back (on them),” she says.

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