According to research conducted by the International Labour Organisation (ILO), the COVID-19 pandemic is well on its way to wiping out over 190 million employees from the employment market globally. This has been attributed to the significant drop in work hours and reduced revenue for businesses because of extended lockdowns globally.
To survive, organisations are refocusing their business priorities and aligning towards this new reality. As organisations transition from survival mode into navigating this new normal, some critical skills would have to be prioritised. Such skills include Digital Technology, Innovation, Agility, Critical Thinking, and Data Analytics, among others. These skills have become critical as business continuity is the top priority for businesses. Businesses must first survive and then thrive. To do this, companies must project a human face, maintain a good reputation, refocus their strategy, optimise their cost, and retain key talent. The inability to recruit and retain top talent is one of the issues increasingly affecting organisations today.
A survey carried out by Society for Human Resource Management (SHRM), reports that 83% of recruiters within several organisations have had trouble hiring suitable candidates for critical roles. In some cases, it takes as long as 12 months to close the recruitment of a critical role.
This points to the importance of having well defined and smart strategies to attract and retain top talent. Some of these strategies include exciting onboarding initiatives that encourage inclusiveness and early engagement of recruits, sometimes lasting till the end of the first year, all the way to exit management strategies that are well managed to ensure ex-employees become brand ambassadors of the organisation and remain psychologically connected to the system.
A decade ago, organisations were less concerned about how exiting employees felt about their exit management process. Today, with increasing demand and low supply of critical skills and top talent, organisations who wish to remain attractive to top talent cannot afford to not think strategically about their exit management process. According to Glassdoor, 69% of job seekers would not take a job with a company that has a bad reputation — even if they were unemployed. Increased interconnectedness coupled with the widespread use of the internet, means that, at the press of a button, millions of users all over the world have access to opinions which could either make or mar a brand.
It is interesting to note that most organisations tend not to plan for lay-offs as it leads to feelings of unrest for both the management and employees. While the employers are thinking of the potential damage lay-offs can cause to the reputation of their brand, employees are more unsettled about the fear of losing their job. Sadly, only about 29% of organisations have a formal employee exit management process in place as posited by Cushing (2014).
The sudden onslaught of the COVID-19 pandemic has had adverse effects on several businesses all over the world. The global enforced lockdown in many countries has forced business leaders to re-prioritise and ultimately, in many cases, led to the business decision of laying off employees to survive and remain competitive. Most people know at least one person in the past month who has experienced a lay-off. The ILO’s initial projection of 25 million employees to be laid off has significantly increased as stated in the first paragraph to over 190 million. In Nigeria, we continue to hear news of mass lay-offs across industries.
To adequately manage the exit process, organisations must work proactively to protect their organisations and employees as best as they can if the need for a lay-off arises. It is essential to focus on explaining the business reasons behind the decision, while ensuring that those affected are treated fairly. This reduces the chances of unimpacted employees and the public at large perceiving the management’s decision as insensitive.
For example, the poor management of Nokia’s exit management process led to a huge drop in profitability because of bad press and employee grievances. Nokia lost an estimated 700 million euros in sales and 100 million euros in profit between 2008–2010. Poorly managed exit management processes can adversely affect your ability to attract top talent, dampen the internal team morale, damage the brand in the eyes of the public, and cause unnecessary litigations. Hence, it should not be taken lightly.
On the bright side, we have the example of Airbnb’s CEO, Brian Chesky, who on May 5th, 2020, published an announcement confirming the business decision to let go of 1,900 of their 7,500 employees.
From our 27 years of working with global and local organisations to plan and implement successful exit management initiatives, we recommend some key points to consider when executing an exit management initiative. They include:
- Ensure decisions are data-driven rather than subjective
- Ensure the decision speaks to a refocused business and organisation strategy
- Keep communication honest and open
- Make no assumptions. Explain the inevitability and business context behind the decision
- Provide context of new business priorities in a positive light to reassure unimpacted employees
- Provide clarity on the exit management process with emphasis on the benefits that accrue to impacted employees
- The central theme must be your organisation’s core values and empathy
To successfully execute this, exit management and outplacement experts can be of assistance. When exit or outplacement programmes are well executed, the benefits can be huge for the implementing organisation, and can include:
- exiting employees becoming brand ambassadors and advocates rather than enemies
- a rebuild of trust and the psychological contract between the company and the unimpacted employees
- an opportunity to show the organisation’s commitment to employee welfare
- an opportunity to position the organisation as an employer of choice, ultimately attracting top talent
- a reduction in the probability of litigation by disgruntled and affected employees
In choosing the right exit management and outplacement service expert, organisations should look for providers who can align with their culture and is willing to adapt the programme to their specific needs. The creativity and flexibility of the exit management and outplacement service provider is also a critical factor to consider as a business requirement during the exit process. It can change and would require a lot of nimbleness or agility to manage. Lastly, a service provider who has experience in delivering successful exit management or outplacement services for clients across several industries, with evidence of results and testimonials to ensure a seamless and successful execution must be sought.
Through our experience in supporting exit management and outplacement projects over the years, we have learnt amongst other things, three (3) critical factors to delivering successful exit programs. They include:
- Employer and Employee Empathy: To offer valuable insight and advice on the best approach to manage any exit or outplacement program, service providers must be able to see through the eyes of both the organisation and the exiting employees.
- Flexibility and Agility in Approach: Service providers must be willing to meet changing delivery requirements of both the clients and those receiving the outplacement services. This would help to boost participation levels and the delivery of results to the client.
- Have a Partnership Mentality: Be involved as a project partner and owner. Service providers should support and advise from the perspective of ‘if this fails, the client and I will both take the fall. Our brands are at stake’.
In conclusion, exit management processes can be painless when well-managed by experienced professionals who are realistic, inclusive, and driven with compassion.
Written by:
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| Joshua Ademuwagun
Managing Consultant |
Nimi Adeyemi
Assistant Consultant |
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References
A Message from Co-Founder and CEO Brian Chesky (2020) [1]
Cushing (2014) [2]
Glassdoor (2019) [3]
International Labour Organisation (2020) [4]
SHRM (2019) [5]