The COVID-19 crisis has hit the markets hard. As businesses are facing market shrinkage, lower incomes, and cash crunch, people are losing jobs across sectors. According to recent estimates by the UN labor agency, nearly half of the world’s workforce is at risk as job losses soared due to COVID-19.
As a CHRO of your company, you have to handhold your workforce through reduced pays. If things don’t get better, you may even layoff a few of your employees. Are you prepared to face it?
Businesses are going lean to survive the crisis. For many companies, one of the significant costs is the human resources cost. Layoffs are painful for employees and challenging for HR managers and the company. Other methods may include reduction/ deferred or cancellation of bonuses and other variables in compensation, freezing of salaries, forced temporary leave-without-pay or cuts in salaries. There can be other cost-cutting measures like complete retrenchments, bans on overtimes (and therefore the bonus pay that comes with it), enforcing new schedules with revised work hours.
How to deal with retrenchments and lower pay
Getting a bad message through is not easy. The employees will obviously not like it. According to a recent study by TeamBlind , more than 70% of the tech employees will have an issue with whatever you, as an HR manager or CHRO will propose and enforce as they don’t trust you. You may have to deal with all employees even though you decide to layoff only a few. You need to decide whom to retain and to layoff? The entire process is time-consuming and emotionally exhausting.
Here are 7 tips you can consider when you go for retrenchments and pay cuts
1. Use technology to communicate: Use a tech platform instead of dealing with everything in person. The teams must communicate over the platform, so there is minimal distortion in the handling of the situation. This platform can also tell people what the ‘new normal’ looks like in the organization. Platforms like Snapcomms can help reach and engage employees on desktop, mobile and digital signage. Try out similar platforms and see what best suits your needs.
2. Infuse empathy into layoff: Amidst the tech, the efforts should not become sterile of empathy. They are running through a rough phase and so is your company. Don’t forget to be kind to all the parties.
3. Treat people with dignity: Employees will always remember how they were treated, and you, as an HR manager, need to remember that it will impact your retained employees.Help the retrenched employee with job resources and make the exit smoother. Be open to talking with them about their issues. Extend a helping hand and let them go with dignity.
4. Engage and motivate the retained employees: Keep the retained employees’ morale and motivation high by offering them support, assistance, tools to be more productive and keep the culture intact. According to a survey done by Totaljobs, two-thirds of workers quit due to a lack of learning and development opportunities. Why not use the current crisis to revisit employee learning and training aspects and upskill them to face the present scenario and prepare for the future?
5. Don’t sack the employee if you can retain them: If possible, find another way to keep them in the organization with a sabbatical or a break with the clause that they will return to work once the situation normalizes. They can be offered another role, reduced pay or any other detour by which they might be able to retain their job and still not be a burden on the company. If they can be held on to and it is better for them that way, by all means, do it.
6. Prepare them for the eventuality: In most cases, you may know the people who will be in the line of fire. It is better to inform them about their slim chances in the organization. It will prepare them psychologically to expect the decision and give them time to start working on their own plans.
7. Time to review HR policies: This is the right time to revisit HR processes, procedures, and policies you have been using all these years. Is there any scope to save time and money and yet recruit and retain the smartest talent? The answer is usually a big YES.
With AI-powered technologies in recruitment, you save resources on regular activities and pick great talent. For example, Otomeyt, the AI-powered pre-employment assessment platform for technical recruitment, can help build a smart team of developers that check the quality, scalability, and performance of the code with greater accuracy and speed.
If you hire the right talent, you will have lesser people to let go later.
Over the centuries, the world has witnessed many pandemics and when they ended, people started to rebuild. Your leadership, communication and technology will go a long way to help you overcome this crisis. Keep the spirits high and get tech-friendly. Remember, there is always a brighter side. It is time to identify it and lay a strong foundation for a better tomorrow.