Your Most Important Asset
All of these issues - transition, legality, security and continuity - are important to ensure that retrenchments and terminations inflict minimal damage to the organisation.
Ultimately, though, it is important to remember that retrenchments and terminations involve people - those leaving, those staying and those managing the procedure. As such, expectations differ, reactions vary and assessment of the success of the process will range from "unfortunate but fair" to "what a bunch of bastards".
"These days, young people come out of college knowing that at some point in their career they'll be made redundant. The 'job for life' concept is gone. Change is the only constant, particularly in the IT industry," says one CIO. But despite this awareness, and the view of another CIO who believes "a lot of the skills involved in handling terminations and retrenchments are intuitive", there are still plenty of pitfalls that could have serious consequences for all concerned.
"The first time I was retrenched was appalling," says DIMIA's Hannah. "We spent three months in a sort of departure lounge waiting to find out what would happen to us." Other CIOs have shared similar experiences, although most feel that over the last decade the retrenchment process has improved.
"The second time was different," Hannah says. "That time I knew how to handle it. People these days being retrenched take greater control of the process, so it is not so much 'done to you'. These days there is also less stigma and more understanding [in the marketplace] for people who have been retrenched."
"Retrenchment is, unfortunately, a mature process," says Tony Clasquin, CIO for Colonial First State. The fortunate consequence is that an industry has grown up around it to provide a range of services and assistance to uncertain managers. The expertise of third-party outplacement firms can assist a firm of any size in developing and executing plans for employee terminations, particularly in difficult circumstances. In some instances, Burnicle says, these need to be set up months ahead of any retrenchments. "From the moment an organisation is even considering retrenchment, they should be using outplacement help."
As an example, Robert Walters' Burnicle cites an organisation where a number of staff were considered to be potentially violent and it was thought they would react badly to retrenchment. A security officer was employed as an ordinary staff member weeks before the retrenchments so as not to arouse suspicion, and was then on hand to physically remove anyone from the building. "As it turned out, the people we thought might be trouble took the news very well," Burnicle says.
As well as pre-termination planning, outplacement firms will offer employment and, where needed, psychological counselling, assistance in preparing CVs and generally smooth the process for the employees.
As with poorly-handled performance reviews (where one CIO suggests "we're too tactful"), problems can arise in termination situations when managers do not follow a script or due process, and vary their message, often to the confusion of the employee. Such is the case with the hypothetical manager who admits to a departing employee that this is not his idea, and personally he does not agree with it. The employee thinks this is an indication that they will be called back in the future.
"We've had people who have refused to admit that they have really been sacked," Burnicle says. "They never leave the first stage of the grief curve. You have to make sure people's expectations are correct. Managers should be put through some training in how to handle the situation. Many people have training in how to interview someone for a job, but who gets training in how to sack people?"
Importantly, Burnicle says, it should always be made clear that this is all about the role: the role is gone, and the retrenchment should not be taken as a slight on the individual. That way, you protect everyone's interests. If you suggest otherwise, a raft of industrial relations and personal dignity issues arise. Costs of programs, he says, vary from about $50,000 for a senior executive to $4000 to $5000 for workshop groups of 15 people for several days. "If need be, we'll be there five days a week for as long as it takes."
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.