Avoiding Layoffs and Cutting Expenses with Rapid Redeployment
No company wants to lay off its employees. The Great Recession of 2008 taught many organizations that letting go of people has downstream negative consequences to employer brand, employee morale and productivity. Anat Lechner, a clinical associate professor of management at New York University’s Stern School of Management has noted that employers often underestimate the direct and indirect costs of a layoff – everything from legal fees and severance to lower productivity among surviving employees, loss of institutional knowledge and future costs of recruiting and training new employees once the economy recovers.
By looking for ways to keep employees, companies retain tribal knowledge and can help employees upskill in their roles, engage in internal gigs and develop new skills – or exercise ones previously unknown to the employer. In this way, organizations can continue to strengthen their workforce and innovate their way through even the most difficult of economic conditions. And once the bad times have past, organizations that have retained their employees can reap the rewards of having a more loyal group of workers and higher employee satisfaction ratings on sites such as Glassdoor. Companies that have done everything possible to retain their people are also likely to be more agile and competitive ‘out of the gate’ when business picks up than those who have let go of talent. The recent era of low unemployment has also made organizations acutely aware that the talent shortages and skills mismatches that existed until just a few short months ago will likely reappear once the economy recovers.
In the past 10 years, many company cultures have also transformed to become more focused on employee experience. Business leaders have declared that corporate responsibility extends beyond traditional stakeholders to include employees. In 2019, the Business Roundtable redefined corporate responsibility, creating a new standard for delivering shareholder value to include ‘investors, employees, communities, suppliers and customers.’ This creates an atmosphere where employers must consider their options before letting go of good talent.
Yet, with the magnitude and length of the current pandemic-induced recession unknown, many organizations may feel they have no choice but to lay off a percentage of their workforce. A recent working paper by the Becker Friedman Institute at the University of Chicago concluded that just over 40% of the layoffs occurring during the current crisis will likely be permanent, not temporary. While it’s true that permanent layoffs may be an unavoidable option for some companies, they don’t have to be the first or only option. Several organizations are successfully redeploying employees, both internally and externally as shared talent.
Rapid redeployment is gaining attention as companies look for opportunities to transfer current employees to internal roles, projects and temporary assignments within a matter of days or weeks. In the short term, redeployment can help organizations shift talent from low-demand or low-volume work to high-demand areas of the business, as well as help companies avoid the costlier option of laying off members of their workforce. Longer term, redeployment can be a wise strategy as companies alter their business models to incorporate digital offerings and find new ways to work with suppliers and partners, as well as serve customers. The ability to leverage the institutional knowledge of the existing workforce and employees’ familiarity with their customers will be critical to a company’s ability to smoothly shift to new business models and will minimize the time to productivity by reducing onboarding time of new employees.
The short- and longer-term opportunities require organizations to look at talent mobility, which includes redeployment and career development, in a new way.
As we find ourselves in the midst of reinventing the way we work, companies may find their existing redeployment systems inadequate to meet current needs. The fix is not complex or difficult. It does, however, require having the right resources and tools in place to help both employees and HR.
Redeployment-specific online resources for employees, such as focused decision-making and preparation tools, enable employees to get ready for internal roles by helping them assess their suitability for open roles, understand and convey transferrable skills, update their resumes, network and prepare for internal interviews. In addition, just as employees receiving outplacement services would work with a career coach, resume writer and job search expert to prepare for a role with a new company, this same guidance allows internal candidates to put their best foot forward and compete on equal footing with external candidates.
For HR professionals, the ability to hold virtual job fairs, provide company-wide visibility into open roles and project work, and have a line of sight into the skills of their workforce will improve redeployment outcomes. As with any process, data analytics and reporting tools are essential to track progress, outcomes and cost effectiveness.
In the long-term, successful internal redeployment is part of a larger organizational culture of talent mobility – one that values continuous learning, reskilling and upskilling, and stretching employees’ capabilities. One of the surprising outcomes of today’s disruption is the realization by companies that employees are willing and capable of learning new skills and remaking themselves as needed to meet the needs of their companies. Now is the time for organizations to continue building on this momentum by making continual career development and reskilling available to all employees.
Redeployment and career development promote the employee experience and bolster employer brand, in turn strengthening the appeal of your firm as an employer of choice.