John Pezoulas’ Post

A good read on the shift in how companies approach layoffs. To summarize; Shift in Blame: While overhiring was once the main reason for layoffs, a significant number of HR leaders now attribute cutbacks to employee underperformance. Leaders' Perspective: This shift might reflect a change in how corporate leaders view employees and remote work since the pandemic. Hidden Motivations: Companies often avoid stating performance issues as a reason for layoffs to protect employees' feelings and their own reputation. Potential Bias: Performance-related layoffs could disproportionately impact women and people of color due to existing biases in performance evaluations.

If you are citing employee underperformance as a reason for layoffs, you don't actually have an employee problem, you have a leadership problem. Ouch. Could your employees be underperforming? Sure. Will firing them and hiring new ones en masse fix the problem? Absolutely not. You're going to be disappointed with the next of hires, too. And, btw, you’re not only blaming the employees, you’re blaming your recruiting process by doing this. Did they just find really crappy players? Of course not. Some employees may be lacking the right skills (head), motivation (house), or systems (hands) to individually perform OR they might be lacking the right people programs (house) to be at the top of their game such as being compensated fairly for the role in the market and against their peers, or knowing what their next career move might be. But that should be a very small number, and those folks should be coached and potentially counseled out if formal performance improvement processes like a PIP don’t work. That is not the same thing as a layoff and claiming a chunk of your people just aren’t performing. You should be asking if your employees have the right individual and organizational support. Do the people managers and people leaders know what good looks like for each role and have the skills to coach and give feedback to elicit strong performance? If the answer to those questions is yes, then either you do have a horrible recruiting problem or your gaslighting your employees and yourselves. You don’t have an employee problem that a layoff is going to fix. 

Talent Management is the key to retention and is a central skill for HR leaders and practitioners. Putting the right person in the right seat can be harder than it sounds, and accountability for performance lies equally with the company, the employee, and the manager. Thanks for sharing this important article and your thoughts, Laura Hume.

Staff alterations, such as layoffs, restructuring, or significant changes in roles, can have several disadvantages: Reduced Morale: Changes can lead to anxiety, stress, and decreased morale among remaining staff, impacting their productivity and engagement. Loss of Expertise: Departing employees often take valuable skills, knowledge, and experience with them, which can be difficult and time-consuming to replace. Increased Workload: Remaining employees may have to take on additional responsibilities, leading to burnout and reduced job satisfaction. Disruption of Team Dynamics: Alterations can disrupt established relationships and workflows, impacting team cohesion and collaboration. Costs: Severance packages, recruitment, and training new employees can be costly and time-consuming. Impact on Reputation: Frequent or poorly managed changes can damage an organization's reputation, making it harder to attract and retain talent. Decreased Innovation: Loss of experienced staff can stifle innovation and creativity within the organization. Operational Disruptions: Sudden or significant changes can disrupt daily operations, affecting overall business performance and customer satisfaction. Legal and Compliance Risks: Staff alterations may lead to legal challenges, especially if not handled in compliance with labor laws and regulations.

One year after they cited overhiring as the primary cause of layoffs, some 30% of HR leaders, in a new report, blame underperformance for cutbacks—placing it in a tie with overhiring as the number-one factor. Restructuring and incompatible skill sets closely follow, according to data from LHH, but the focus on performance has surprised many experts. They say it may reflect corporate leaders’ views of both employees and remote work since the pandemic ended. #layoffs #employeeperformance #overhiring

Wow! "About 50% of the 600 business leaders surveyed by ResumeBuilder.com found that most of their layoffs - about 75% - were not needed to cut costs. Instead, about 80% say their companies used layoffs to get rid of poor performing employees instead of firing them." I say, wow! because of the overall effect layoffs have to the morale and culture of organizations, although those same leaders indicated that they think "terminations disguised as layoffs are better for morale." This seems out of sync with human nature - your teammate gets laid off, you worry that you may be next - I think that's just messing with people's minds. The article goes on to point out that it also shows a lack of manager training - "Managers need more training on how to work with employees to avoid termination ... Particularly with younger managers who are relatively new to their roles, layoffs may seem like the easier option without the potential legal repercussions that a firing may bring." After working in the people-leader development arena for over 20 years, I still find it appalling the amount of money and productivity wasted because leaders aren't afforded the opportunity to skill up into their new roles. Executive Forum's Leadership Pathway was designed so organizations can plug leaders in at the development level they need and step out knowing "how" leading at that level can be accomplished with greater effectiveness and less effort. I invite you to take advantage of the Pathway this fall. Skill up yourself, or skill up your organization. The investment is immeasurable. https://lnkd.in/gcrqCvQg If you don't have a Business Journal subscription, apologies.

Layoffs are one of the most difficult challenges an organization can face. The impact is felt by everyone across the organization; it can damage trust, decimate morale, curb employee engagement, and hurt productivity. A healthy company culture can be resilient and recover, but it takes a deliberate and thoughtful focus. 𝗖𝗼𝗺𝗽𝗮𝘀𝘀𝗶𝗼𝗻𝗮𝘁𝗲 𝗺𝗲𝘀𝘀𝗮𝗴𝗶𝗻𝗴 𝗶𝘀 𝗸𝗲𝘆 It is important to be transparent about the reasons for the layoffs and what the organization is going to do moving forward. Express how much employees are valued, and that jobs impacted are not an indicator of personal performance. Share what is being provided to the affected employees to ease the transition as much as possible. Take a communicative approach that ensures employees understand they are respected members of the team. 𝗕𝗲 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗶𝗻 𝘁𝗵𝗲 𝗽𝗹𝗮𝗻𝗻𝗶𝗻𝗴 Carefully think through plans for how roles will be restructured and responsibilities redistributed. Without a clear idea of what the transition will look like, employees can experience added confusion and stress. Consider how to fairly compensate those that will be taking on additional responsibilities or workload. Anticipate how to answer questions about the company’s plans. Prepare your staff to respond to employee concerns with compassion. 𝗗𝗲𝗰𝗶𝗱𝗲 𝗲𝗾𝘂𝗶𝘁𝗮𝗯𝗹𝘆 Do not over-rely on length of tenure or subjective manager ratings to make layoff decisions. Using these factors alone can introduce unintended bias and deprive the organization of needed talent. Use criteria that are objective and skills based. Skewing decisions towards employees with less tenure can undo any progress you’ve made building a representative workforce. You may unintentionally communicate that diversity is not a priority for the organization. 𝗦𝘂𝗽𝗽𝗼𝗿𝘁 𝗲𝗺𝗽𝗹𝗼𝘆𝗲𝗲𝘀 Employees who remain after layoffs experience uncertainty and other mixed feelings around what's taking place. They are 49% more likely to be actively seeking a new job. Messaging is critical; employees need help maintaining morale as well as logistical support through the transition. Encourage managers to have more frequent one-on-one meetings. Consider temporarily reprioritizing or reducing workloads so that employees have the bandwidth to adjust. A third-party and confidential resource like tEQuitable is a valuable outlet for employees when tensions are running high. Employees need support processing how to cope with the changes; sometimes they just need to express their frustration or vent in a safe space. Speaking with an external Ombuds can help relieve the pressure and facilitate re-engagement with work. Most importantly, treat staff with dignity and respect. Make them feel appreciated and give them something to look forward to. This is an opportunity to “Walk the Talk” on your cultural values. It’s most critical that these are demonstrated during the tough times. It will speak volumes both inside and outside the company. 

#1 measure I use to see if my business is improving its efficiencies, is revenue / number of FT team members. September 2022, we changed course, and reorganised our organisation, via a mixture of resignations & terminations, we saw 6 people leave the organisation. Today, we have less team members than September 2022, and we have higher revenue…….. Several team members were clearly bludging and producing little to no work, or it required that much rework from others, that it was pointless. Yes, I made the statement on the eve of lockdowns in March 2020, that I wouldn’t terminate any team members during Covid. Probably cost me $100-200k of profit. And yet, it was the right thing to do, so I have no regrets. But now, today, I am all over new team members, are they providing an net positive benefit to the organisation? Are they enhancing the reputation? Am I, leading them? Managing them? Or failuring them? There is no magic bullet for hiring, but those that can fire fast, have the advantage. As every team member that I thought weren’t the right hirer after 2 weeks, turned out to be the wrong hire after 3 months. Every team member that I thought had what it takes to succeed in this industry after 3 weeks, I have loved to work with and would highly recommend them. What do you look towards for your new hires?

Employee Confidence at a Low: How Can Businesses Rebuild Trust? A recent report by Glassdoor indicates a concerning trend: employee confidence is reaching new lows. While economic indicators may be improving, workers remain skeptical about their employers' prospects. This skepticism seems particularly high in the tech and media industries, which have seen a significant increase in layoff discussions. What's Driving This Decline? The report highlights two key factors: ◾ Transparency Concerns: Employees who experienced layoffs (or those worried about them) are much less optimistic about their company's future. This suggests a communication gap between leadership and employees. ◾ Widespread Unease: Even employees who haven't been laid off are expressing a decline in confidence. This points to broader concerns beyond specific layoff announcements. What Can Businesses Do? Building trust and fostering a positive work environment are crucial during uncertain times. Here are some suggestions: ◾ Open Communication: Maintain transparency with your employees. Address concerns directly and provide honest updates about the company's direction. ◾ Leadership Support: Empower managers to provide emotional support and professional development opportunities for employees. ◾ Focus on Retention: Invest in strategies to retain your valued talent. Open communication, career development opportunities, and a supportive work environment can go a long way. Remember, a strong employer-employee relationship is essential for a thriving workforce. By prioritizing communication, transparency, and support, businesses can rebuild trust and navigate challenging times effectively. #EmployeeConfidence #Communication #Leadership #Retention #Klarec

I don't find this Korn Ferry article a surprise noting that 30% of employee layoffs are due to underperformance issues. A few business trends that continue to perplex me are related to work from home, outsourcing, and performance reviews. All, in my opinion, have led us to this situation. First, work from home. While a necessity during covid, no one will ever convince me that work requiring teams, mentoring, employee onboarding, comraderie/culture and ultimately retention are not adversely impacted by this direction. And once you take this step you are not much better off with a work from home employee than an outsourced employee. Yes. Staff like it. But I argue that it is not effective for the company, nor long term for the employee, when done to excess. This also makes employee retention and recruiting more difficult, which impacts institutional knowledge and skills, creating underperformance. Leading to layoffs. No surprise. Second, outsourcing. No question that this resource strategy can provide workers that scale with flexibility (and reduce need to layoff staff), and can quickly add expertise for new processes and technologies. But as I have preciously written, this is often done without a manageable plan for entry level recruiting, training and building bench strength. It also is often treated as a silver bullet to reduce costs and increase performance, yet we know excellence does not easily scale. Not in sports. Not in entertainment. Not in business. Without proper oversight and performance management this could lead to massive rehiring to reverse course after a few years, and continue to impact performance. Leading to layoffs. No surprise. Lastly, employee performance reviews started becoming the exception rather than the rule about a decade ago. It became more of an annual exercise to manage compensation rather than a continuous improvement process addressing increasing skills and performance issues and as an ongoing activity. Proper performance management is as much a skill as it is a science. It takes work. It can be uncomfortable to do. And it's crucial for consistent performance, growth and minimizing layoffs to respond to business changes over time rather than as a knee jerk reaction. Otherwise we see large scale layoffs. Yes, no surprise. The adage "the more things change, the more they stay the same" rings true. To circumvent avoidable problems, companies must prioritize proper practices in work from home policies, outsourcing strategies, and performance management to maximize company performance and minimize unnecessary layoffs. #outsourcing #workfromhome #performancemanagement #cfo #ceo #chro #peopleandculture