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Blog: The Business of Management - Layoffs
 

May 6th, 2008

Hoping for the Best, Preparing for the Worst

Losing a job is always traumatic, and that’s why stories like this one in the Chicago Tribune—titled “Are you prepared if you lose your job?”—can serve as a good jolt for anyone who thinks that they are immune from the incessant layoffs, buyouts and cutbacks that seem to be a fact of life in the modern American workplace.

What struck me about this article wasn’t the advice it offered, which was pretty straightforward and basic. What got me thinking were some of the statistics listed in the Tribune story, such as “Young workers face the prospect of changing jobs nearly nine times before they reach age 32, according to the Bureau of Labor Statistics, ” and that in March, “the average length of unemployment for all ages was nearly 17 weeks, [and] workers over 50 face longer job searches.”

I’ve written here before about how stressed out workers are and the very different and modern approach some are taking as they cope with layoffs. Fact is, for all the talk about a “talent shortage” or a “war for talent,” it still is very much a buyer’s market when it comes to getting and keeping a job—especially now as we head into a recession.

The Tribune story makes the point that today’s workers always need to be preparing for the worst and that “there’s little excuse these days for not being ready to kick a job search into high gear at a moment’s notice.” That’s great advice to keep in mind, because no matter whether it is called a layoff, buyout, cutback or “Productivity Transformation Program,” the stability of the job you’re in today is a tenuous illusion at best.

I’ve learned this the hard way, as I’m sure many of you have too. It’s always great to hope for the best, but you’ll be better off and sleep better at night if you also make sure to prepare for the worst, because it generally happens when you least expect it.


April 30th, 2008

Merger Challenge: Getting the Workforce to Buy In

I don’t fly on Delta or Northwest much these days, so I don’t really have any personal insight into whether the proposed merger of the two airlines makes much business sense. One thing I do know, however, is that making one strong and profitable company out of two struggling ones is near impossible if you don’t get the workforce to buy in.

And, that’s where this one may have a struggle. A story in The Detroit News headlined “Wary workers cloud Delta-Northwest merger” talks about the challenge of merging the workforces of union-dominated Northwest (with about 22,500 union employees out of 32,000 total) with primarily nonunion Delta (where 6,300 pilots and a small number of dispatchers out of 47,000 employees are represented).

The struggle to merge these two old-school airlines into a unified and productive workforce isn’t just about collective bargaining and work rules, but more about the history and culture that is embedded deep in their corporate DNA.

“Delta’s an interesting company in that it’s been able to maintain a decidedly nonunion culture while staying on relatively good terms with its employees,” said Michael Boyd, president of the Boyd Group, an Evergreen, Colorado-based consulting firm. “Even through bankruptcy, management has succeeded in convincing employees that their best representative is themselves.”

But, The Detroit News points out, “selling that culture to Northwest’s entrenched unions won’t be easy. Even before merger talk began, the Association of Flight Attendants got enough signatures on a petition requesting a unionization vote of 12,000 Delta flight attendants. Neither Delta nor the union has speculated on the outcome of the current election.”

If they can make this merger work, the combined airline would be the largest in the world. “The new Delta,” says The Detroit News, “is expected to employ about 75,000 people after the two companies are fully integrated. [But] employees worry: Will management follow through on promises not to cut jobs or close hubs? If the companies are in such dire financial straits because of fuel prices, will they be looking to cut wages next?”

Those are all good questions, because those are all reasonable worries for workers to have. Delta has promised that no frontline workers will lose their jobs in the merger, but is that realistic given the huge and unrelenting rise in fuel prices?

I question that promise, and so does Joe Tiberi, spokesman for the union that represents 9,500 Northwest baggage handlers. “There’s no way they can combine without massive losses of jobs,” Tiberi told The Detroit News. “We’re also worried about merging our unionized workforce with Delta’s nonunionized workers. We have pensions, but they don’t. We have no guarantee Delta wouldn’t want to get rid of our union.”

It’s hard enough to make one good airline out of two struggling ones when everyone is on board. But it is damn near impossible if you have union squabbling and critical workforce issues to hurdle. The only saving grace here is that Delta’s management seems to be driving this deal, and frankly, Delta’s management seems a lot more sensitive to worker issues than Northwest’s does . That raises the odds of success, but not enough for me gamble my next trip on Delta. I’d be surprised if a lot of other frequent travelers don’t feel the same way.


April 9th, 2008

Tossing HR Under the Table at Home Depot

There once was a time when HR used to have a big, front-and-center seat at the table at Home Depot.

That was back during the imperious reign of CEO Bob Nardelli, when senior vice president for human resources Dennis Donovan not only had a seat at the table, but was a close confidant and part of Nardelli’s inner circle. Donovan certainly had that strategic role that all HR people say they want, and in fact, he had such a key role and was so highly compensated that he was actually made Workforce Management’s list as the highest paid HR executive for 2006.

But that was then, this is now, and Donovan and Nardelli are long gone. It’s not really surprising that Home Depot, a company that has really been struggling, is cutting more staff. What is a shock was the wholesale gutting of the HR infrastructure by cutting 50 percent of the company’s 2,200 person human resources field staff last week.

The move is designed to put more workers on the sales floor, which is ironic because floor staff was whacked so severely during the Nardelli/Donovan regime that you couldn’t find anybody to help you or answer your questions. The old, people-oriented culture of Home Depot was dramatically changed during their time together, and it’s pretty clear to me that the company has struggled, in large part, because of that decision.

So, I applaud the company’s new “Aprons on the Floor” program that should help customer service, but I wonder: is it a good tradeoff if you get more “Aprons on the Floor,” but lose your HR support throughout the company? As part of the cutbacks, Home Depot is creating a HR service center near Atlanta that will handle most of the company’s human resource needs by phone. Stores won’t have a dedicated HR manager but instead, “district teams” will be established that will divide three HR people among a small group of six to 10 stores.

 What does it say about a company that it goes from having the highest paid HR executive in the U.S. to a phone-based human resources support structure in two years’ time? Analysts like this move–one told Workforce Management that the old HR structure “was way overdone and not typical for retail operations like Home Depot”–but analysts are always fond of short-term cost-cutting and are less concerned with the long-term impact.

I’m not sure if this move to minimize HR and maximize help on the floor will work any more than the old strategy did, but it will be interesting to watch, because it’s a real-time case study on the value HR brings to an organization. If Home Depot can make this work, it may push other companies to re-examine the value of their own HR departments. And when that happens, HR can kiss that seat at the table goodbye.


February 19th, 2008

The Modern Way to Cope With a Layoff

Layoffs used to be something workers had to handle on their own. But, as with most things in the modern workplace, even the old way of losing your job has a new twist.

“Like so many other personal experiences transformed by the Internet, getting canned need no longer be endured in quiet, isolating shame,” according to a story in today’s Los Angeles Times. “Technology is allowing people to turn a traditionally private trauma into a quasi-public event, drawing quick moral support and even job referrals,” the Times reports. “ ‘This is something that used to be shared over the dinner table. Now the whole world can watch and participate,’ technology forecaster Paul Saffo said.”

The gist of the story is this: Workers who get laid off these days are increasingly taking a very public approach to their plight, plugging friends and colleagues into what they are going through with online tools such as Twitter. This is an online service “that notifies your friends, by mobile phone, instant message, e-mail or on the Twitter Web site, what you are doing at any given moment. These messages of 140 characters or less, called tweets, are sent to anyone who subscribes to or follows your Twitter stream.”

The Times story follows Ryan Kuder, a senior marketing manager at Yahoo, who was one of 1,100 employees laid off last week. As the story puts it, “Self-broadcasting what is usually a private experience gave Kuder more than 15 minutes of Internet fame. It gave him solace, and, more important, job leads. The San Jose husband and father of two was flooded with ‘positive tweets’ offering support as well as connections via social networking services such as Facebook and LinkedIn.”

But if Ryan Kuder’s layoff from Yahoo seems to be an instance of bad news turning into good, there are still plenty of layoffs that end up the old-fashioned way—with depressed, demoralized workers left with no jobs and little hope. Workplace columnist and blogger Dianne Stafford of the Kansas City Star writes today about midcareer workers who find themselves suddenly out of work and without the network, or technology, to effectively find new work.

“At least three of my e-mails this morning contained admissions that the writers simply didn’t know how to network or that they didn’t think they knew anyone who could help them find a job,” Stafford writes. “In their worried job hunts lies a warning to others: It’s no longer enough to sit at your desk and do your job well. Someday, perhaps through no fault of your own, you may not have that desk anymore—and it’s vital that you know people outside that job.”

I would take this one step further: With layoffs seemingly on the rise everywhere, often with little rhyme, reason or logical business purpose, having a fallback plan just in case something does happen is essential. That’s true for employees at all levels, from worker bees to midlevel managers to senior supervisors. Hoping for the best is a good way to live, but planning for the worst is the best way to survive.



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