Why Companies Lay People Off - Preparing for that Possibility
Tuesday, March 9, 2010 at 8:48AM Through my long career losing one's job is a very traumatic experience to anyone the first time around. It actually gets easier subsequent times since much of the initial shock and pain found in the first layoff has taught a professional how to be better prepared for it.
In the recent economic turmoil many more professionals have found themselves on different paths than what they thought they would experience. For many it is their first time or so long since they have gone through the experience that their pain, confusion and angst is understandably high. Even the most seasoned professional looks at the situation with some degree of frustration and confusion. After all they were doing fairly important work and now suddenly they are out of an organization they have given so much of their efforts to.
I often find myself giving advice to many professionals in these situations from my own personal perspective in that I have gone through it myself several times. Many have found my advice useful so I thought I would share some of my thoughts on the subject:
- Why is a company laying off? Answer - economic reality bites. Let's face it, many companies are not necessarily well prepared for change especially rapid, downward changes. So when they do take actions, it is often more of a reaction than any truly planned action. This is not to say that any organization releases employees lightly. Quite to the contrary they are loathe to do so. However it is not something that they adequately prepare for nor practice until times call for it. Quite simply it is beyond an organization's control on when they lay people off. It just happens.
- So why am I being laid off? Answer - it's nothing personal, it's just business. Most companies view their employees as valuable resources not necessarily as individuals. Even in the most individual-oriented company, everyone has a value that has to be weighed by the company process in terms of being retained or released. For example younger more agile individuals even those who have contributed significantly to a company can find themselves released while others are retained. Why? The company weighs their value to the company. If a person only contributes in a certain way that can be more or less valuable to a company versus others who do more. To be honest there is no real "formula" or "scientific process" being applied. It is matter of perception by decision makers beyond an individuals control.
- Was it something that "I" did to get laid off? Answer - Plain and simply no. In almost all instances of being laid off I can personally recall every "mishap" that might have caused my being released. From personal experience that is the wrong avenue to take. While it is true that one might have made mistakes, if they had been heinous enough to cause a layoff more than likely one would have been released due to disciplinary actions prior to being laid off. One of the biggest wastes of energy is looking at a company and imagining any number of scenarios as to why one was laid off. It ranges from "so-and-so was out to get me", "I should have explained my value more", "I should have done more tasks", etc. I have seen executives of profitable divisions who did outstanding work, engineers with PhDs and patents, and sales personnel who brought large deals to an organization released in the same wave as other professionals who were not as well known. It is never one's fault for being affected by a layoff in such dire economic times.
- What do I do now? Answer - Simple. Find a new opportunity. Note how I always call it an opportunity and not a job? This is an important distinction. An opportunity is something that interests you whereas a job is something that does not. It is the passion driven by interest that attracts employers. If you are interested in doing something it shows.
One of the major perspectives someone being laid off tends to forget is how their departure among the number of their fellow employees impacts their organization. I am not merely talking about immediate work efforts but rather morale as a whole. How an organization deals with a layoff is not only important to those leaving, but those staying as well. While it is true that many employees will react out of fear of losing their positions, energy that is fear-based lasts only a short while. Employees will become resentful, fearful and stressed resulting in any number of issues to an organization ranging from late projects, to health-related absences, to a poisoning of the company culture - just to name a few. Essentially when a lay off occurs, it erodes the goodwill between employee and employer. How well the transition is managed determines how much erosion occurs and how soon the healing process begins. I often advise those who are let go that their worries are over and their course of action is clear. Those that remain behind are the ones that need sympathy and support as their turmoil will take a long time to settle down.
One of the greatest lessons being laid off teaches a professional is how to be entrepreneurial - to find opportunities, to network, to grow, to find business own their own, to face repeated rejection with optimism and enthusiasm, and to ultimately believe in themselves. As companies continue to lower their costs by letting employees go, they are in my opinion inadvertantly creating a newer, better workfoce that will have several traits:
- More self-reliant and self-motivated.
- More focused on doing what they themselves are capable of doing for others both inside and outside of an organization.
- More confidant in their capabilities and values in delivering quality, affordable and effective solutions to customers.
- More capable of making significant decisions that affect their lives with greater clarity and determination than before.
- More unwilling to "settle" for something as opposed to going out and "making" it happen.
These are not bad traits to have in any employee. It is just that employers will find a more mindful, independent workforce than they previously thought. This workforce will not only have the talent but the the motivation to focus on what interests them. For any professional going through a transition focus on the future, not the past. Trust me, it helps.
