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Layoffs: HR's Moment of Truth


When employees are let go, treat them with the respect they got at their hiring

What is the role of human resources as the world goes through turmoil, and what is its future as so many industries face extreme change?—Effendi Ibnoe, Bali, Indonesia

Talk about timing. Your question arrived in our in-box the same day that we received a note from an acquaintance who had just been let go from his job in publishing, certainly one of the industries that is facing, as you put it, "extreme change." He described his layoff as a practically Orwellian experience in which he was ushered into a conference room to meet with an outplacement consultant who, after dispensing with logistics, informed him that she would call him at home that evening to make sure everything was all right.

"I assured her I had friends and loved ones and a dog," he wrote, "and since my relationship with her could be measured in terms of seconds, they could take care of that end of things."

"Memo to HR: Instead of saddling dismissed employees with solicitous outplacement reps," he noted wryly, "put them in a room with some crockery for a few therapeutic minutes of smashing things against a wall."

Attentiveness and Dignity

While we enjoy our friend's sense of humor, we'd suggest a different memo to HR. "Layoffs are your moment of truth," it would say, "when your company must show departing employees the same kind of attentiveness and dignity that was showered upon them when they entered. Layoffs are when HR proves its mettle and its worth, demonstrating whether a company really cares about its people."

Look, we've written before about HR and the game-changing role we believe it can—and should—play as the engine of an organization's hiring, appraisal, and development processes. We've asserted that too many companies relegate HR to the mundane busy-work of newsletters, picnics, and benefits, and we've made the case that every CEO should elevate his head of HR to the same stature as the CFO.

But if there was ever a time to underscore the importance of HR, it has arrived. And, sadly, if there was ever a time to see how few companies get HR right, it has arrived, too, as our acquaintance's experience shows.

So, to your question: What is HR's correct role now—especially in terms of layoffs?

No Hired Guns

First, HR has to make sure people are let go by their managers, not strangers. Being fired is dehumanizing in any event, but to get the news from a "hired gun" only makes matters worse. That's why HR must ensure that managers accept their duty, which is to be in on the one conversation at work that must be personal. Pink slips should be delivered face to face, eyeball to eyeball.

Second, HR's role is to serve as the company's arbiter of equity. Nothing raises hackles more during a layoff than the sense that some people—namely the loudmouths and the litigious—are getting better deals than others. HR can mitigate that dynamic by making sure across units and divisions that severance arrangements, if they exist, are appropriate and evenhanded. You simply don't want people to leave feeling as if they got you-know-what. They need to walk out saying: "At least I know I was treated fairly."

Finally, HR's role is to absorb pain. In the hours and days after being let go, people need to vent, and it is HR's job to be completely available to console. At some point, an outplacement consultant can come into the mix to assist with a transition, but HR can never let "the departed" feel as if they've been sent to a leper colony. Someone connected to each let-go employee—either a colleague or HR staffer—should check in regularly. And not just to ask, "Is everything O.K.?" but to listen to the answer with an open heart, and when appropriate, offer to serve as a reference to prospective employers.

Three years ago, we wrote a column called, "So Many CEOs Get This Wrong," and while many letters supported our stance that too many companies undervalue HR, a substantial minority pooh-poohed HR as irrelevant to the "real work" of business. Given the state of things, we wonder how those same HR-minimalists feel now.

If their company is in crisis—or their own career—perhaps at last they've seen the light. HR matters enormously in good times.

It defines you in the bad.

Jack and Suzy Welch look forward to your questions. You can e-mail them and view their new website at www.welchway.com For their podcast, go to www.businessweek.com/search/podcasting.htm.

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