For several years, we’ve been hearing about a looming war for talent. Baby boomers are starting to retire and fewer young workers are available to replace them, which means demand will soon outstrip supply in the labour market. Already we’re seeing the impacts of that significant demographic shift in certain industries, disciplines and geographies.
The profound challenges posed by this talent crunch have been overshadowed of late by an economic meltdown. In the wake of the subprime mortgage crisis and a $700 billion stablization plan in the U.S., world markets have been on a roller coaster ride, credit has become scarce and the engines of industry are starting to seize up. Forecasts for Canada’s economy are relatively better yet still rather grim. Every business will be affected to some degree by this downturn, particularly those in the financial, real estate, construction and manufacturing sectors. As a result, many companies will consider downsizing.
Yet indications are that this slowdown will not last. Canada’s economic fundamentals remain strong: our government has been running surpluses for several years, and taxation, interest rates and unemployment are all at reasonable levels. Internationally, governments have moved quickly to address the crisis and make credit available, while India and China are coming online as consumer nations. In the medium term, the U.S. will recover from its current economic woes. The Atlantic Canadian business leaders I have spoken with recently share my sense of optimism — a sharp contrast to the doom and gloom that prevailed in the meltdowns of the early eighties and nineties, and the more recent dot-com bust. Thus, companies choosing to downsize will find themselves, as early as a year from now, staffing up to meet renewed demand for their products and services. How organizations manage these restructuring efforts will determine their ability to recruit employees in the future, when the gulf between the demand and supply of talent will be even more pronounced.
Outplacement decisions are always challenging. Beyond the moral and social responsibility to treat people with dignity and respect, it makes good business sense to effectively manage the human impact of such change. People remember how you treated them and talk about it. If they perceive their experience as unnecessarily negative or unfair, they will share it with friends, family and colleagues. In the age of the internet and social networking, the harm to your employment brand can be swift and far-reaching, and can haunt you when you are ready recruit new talent. There are also the perceptions of your remaining employees to consider. If they believe you have not been fair or respectful to departing employees, they will look for other job opportunities once conditions improve. Those most likely to depart are the individuals with the most options – your top talent.
Clearly, how you manage your downsizing efforts will have a long-term impact on your organization’s employment brand. Employers of choice understand the value of looking at HR from a marketing perspective. They think about employment with an organization as a product like any other with a unique set of features, benefits and a specific target market – the top talent in the industry. Leading organizations strive to develop and communicate a strong employee value proposition that resonates with the type of employees they wish to recruit and retain. Marketing also brings a strategic perspective that is focused on building brand equity. It’s a perspective that recognizes that how you handle downsizing can breed ill-will among exiting and remaining employees, compromising your employment brand and squandering the considerable time and money you’ve invested in building your reputation as a great place to work.
One of the best strategies for protecting your employment brand against the negative impacts of downsizing is to engage professional career consultants to implement a Career Transition program. A well-executed program provides support to everyone impacted by a downsizing. It gives senior management access to expert advice in planning notificationday communications and logistics. Frontline managers get personal coaching to ensure the message is carried out professionally, and with maximum respect. Exiting employees receive emotional support immediately following notice of the job loss, and coaching to conduct a successful job search – particularly critical given current labour market conditions. And remaining employees participate in workshops to understand and deal with the emotions that accompany such changes, improve individual engagement and build team cohesiveness. That’s the real value of a Career Transition program: it keeps your organization focused and productive, ensures exiting employees leave on the best possible terms, and protects your employment brand for the future.
As you navigate these turbulent economic times, keep in mind that the way you treat your employees today – both those that are leaving and those that remain - will have an impact on your employment brand. As economic conditions improve, you’ll find yourself staffing up in the face of more heated competition for talent than exists today. By treating departing people with dignity and supporting their transition, you protect your employment brand with them, with your current staff, and in the broader labour market. And that will give you the advantage over your competitors when the time comes to recruit again.