The FINANCIAL — When it comes down to the crunch, is there a right or a wrong way to dismiss employees? – According to the McLane Group, that’s the question that bothers the contemporary financial world.
As the company noted, there’s no hiding from the fact that the climate at the moment is challenging for thousands of businesses throughout the UK and organisations are striving to become leaner to survive. What with increasing prices, cost of product development (and customers’ reaction to price increases) companies have to become more flexible to absorb these challenges. Unfortunately this has resulted in an increase in employee dismissals.
“From national statistics the picture is that the unemployment rate has increased, the employment rate has fallen and the inactivity rate is unchanged,” Dominic Turnbull, the management consultants The McLane Group, told the FINANCIAL. “There has been another increase in the number of people claiming Jobseeker's Allowance benefit. The number of job vacancies has fallen. Growth in average earnings, both excluding and including bonuses, has fallen.”
In his words, the employment rate for people of working age was 74.8 per cent for the three months to June 2008, down 0.1 from the previous quarter but up 0.3 over the year. The number of people in employment for the three months to June 2008 was 29.56 million, up 20,000 over the quarter and up 384,000 over the year. Total hours worked has fallen by 6.3 million over the quarter to reach 942.0 million. This reflects a fall in average hours worked by workers in full-time employment.
The unemployment rate was 5.4 per cent for the three months to June 2008, up 0.2 over the previous quarter but unchanged over the year. The number of unemployed people increased by 60,000 over the quarter and by 15,000 over the year, to reach 1.67 million.
The claimant count was 864,700 in July 2008, up 20,100 over the previous month and up 10,900 over the year. The Claimant Count has increased over the month in all regions of the UK.
The inactivity rate for people of working age was 20.9 per cent for the three months to June 2008, unchanged over the previous quarter but down 0.3 over the year. The number of economically inactive people of working age fell by 3,000 over the quarter and by 84,000 over the year to reach 7.88 million.
The annual rate of growth in average earnings excluding bonuses was 3.7 per cent in the three months to June 2008, down 0.1 from the three months to May. Including bonuses, it was 3.4 per cent, down 0.4 from the previous period.
There were 634,900 job vacancies for the three months to July 2008, down 47,400 over the previous quarter and down 23,200 over the year. Most sectors showed falls in vacancies over the quarter with the largest falls occurring in distribution, hotels and restaurants (down 17,700) and finance and business services (down 16,200).
The redundancy level for the three months to June 2008 was 126,000, up 14,000 over the quarter and up 6,000 over the year.
“It's every boss’ nightmare; you’ve got great staff that you trust and that trust you but the changing climate leaves you with no choice but to let those colleagues go. So how should leaders go about doing this and is there a right or wrong way?” says Turnball and has his own solution to the subject.
“The only way to avoid cutting great staff is to ensure the organization or team deliver their results and stay within budget. The most common reason for cutting staff is lack of funds or under pressure budget. There is no right way except following some of the tips/guidelines, but each situation will be different. In terms of wrong ways, firing people by text message and email is inappropriate – but i have come across instances!”
Out of the 10 tips on the fairest way to fire staff is more difficult and awkward to deal with for Turnball is:
Be transparent – some people just find this really difficult and tend to blame the organisation or other situations that they seem to have no control over.
Make time for your feelings – not all of us are good at reading our own feelings (never mind other peoples!!).
Be honest – this is about taking responsibility and owning the decision, not easy.
Plan how to notify workers – this can be as challenging or as uncomfortable as the termination itself, particularly if the employee was popular.
As for the whole 10 tips they offer:
Be Transparent: Do not try and couch the reasons behind your decision – stay strong and focused
Plan your Words: Prepare what you’re going to say with a trusted colleague and make sure you always have a member of personnel/HR with you.
Pick the Right Time: Timing is critical – carry out the dismissal at the end of the day as this gives the employee the chance to privately clear out their desk and slip out quietly if they choose. Fire early in the week and never on a Friday so they don’t have the weekend to stew about your decision.
Make time for your Feelings: Before calling the employee into your office reflect on how you are feeling so that when it comes to delivering the bad news you’re direct and don’t preamble.
Be Clear: Own your own feelings and share how you feel – make it clear that this is a business decision
Be Honest: Be prepared to say “I’m sorry, I’ve let you down”; by clearing your conscience you’ll have increased the probability that the impact is as positive as it can be.
Explain Exact Reasons for Termination: Make sure that the employee really does understand he or she is not being dismissed because you are critical of their performance or attitude. Acknowledge them for what they have contributed and the qualities and skills they have. Don’t give false praise just to have them feel better – they will sense this anyway. The reason for this is that often even if we understand it was redundancy because of outside pressures we can easily feel down about ourselves in such situations and lose confidence in ourselves
Redundancy: Make sure that your selection for redundancy is understandable, transparent and legal
Plan your Strategy: If you’re firing a group of people set up an organisational wide communication and sit down each employee one by one
Plan How to Notify Co-Workers: Discuss with the employee how they’d like to handle their departure and how they’d like to let their colleagues know; re-invent their dismissal
The McLane Group helps coach leaders on how to face major challenges and to keep the right composure in order to deliver these difficult messages most effectively and fairly.
“This is definitely not one size fits all! All of our clients are treated as individuals and we will tailor our advice to the specifics of their unique situation,” Turnbull declared to the FINANCIAL.
The consultancy specialises in people, transformation and breakthrough performance and they work with leaders and teams in some of the world’s top organisations, delivering company-wide programmes and personalised executive coaching. The McLane Group deliver and implement major changes in blue chip multi-nationals and have worked closely with Unilever plc – Worldwide, ICI – UK, Abbey National – UK, Hostess Frito Lay – Canada, IBM – USA, Sweden & Italy, Black & Decker – UK, Iveco Ford Truck, Quest International – Worldwide, Campbells Soups – Canada and Gerber Foods – USA. They are currently working closely with Unilever, ITV, IBM, Bakemark and Alliance Boots to name a few.
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