Lessons from downsizing programs

By Kim Harrison,

Consultant, Author and Principal of www.cuttingedgepr.com

The findings of a study into organisational downsizing indicate the types of communication that employees prefer during these troubled times. The research was valuable because few studies have investigated the perspective of those affected while they are in the midst of turmoil.

Downsizing is the planned, intended reduction in personnel in an organisation. Retrenchments take place, the organisation shrinks and is restructured. The purpose is to change processes and decrease size to improve efficiency and therefore reduce costs.

The study reported on the reactions of people who had survived retrenchments in a downsizing organisation, in this case a large US multinational employing 50,000 people. The downsizing operation eliminated the jobs of more than 5,000 employees.

Rumors were rife. When employees went on breaks, it was not unusual to find over 30 in the staff area people talking about the downsizing. “We wasted more than 100 years of salary in all the time that was spent talking about what was going to happen. No one could do any work.”

Survivors expressed the need for communication that would help them work through the many ambiguities that suddenly confronted them in doing their work.

Focus groups with a sample of surviving employees indicated that:

• Effective communication during downsizing provides a relatively complete description of the changes and their potential effects on survivors, especially the effect on job security. Completeness was more likely to be achieved in face-to-face interaction. For communication to be complete, the content had to be specific in order to clarify meaning. For example, complete descriptions of changes such as organizational revenue, sales plans and local changes of staff. Openness was important as well. Managers had to be accessible, willing to engage in dialogue and willing to disclose potentially sensitive information.

• Communication has to be credible. Survivors tended to believe communication when it came from sources considered legitimate and honest (eg their immediate supervisor) and when the information conveyed was consistent with other events they saw happening around them. A significant influence of credibility was the perceived honesty of the information source. Consistency was another attribute that was important to them.

• Supportive communication is considered to be helpful. This typically involves face-to-face interaction with other people, particularly with immediate supervisors, informal and personal, and were perceived to understand their individual needs and concerns.

• The opportunity for participation is important - interactive or two-way communication in order to give people an involvement beyond simple understanding by their supervisors. Some also wanted the opportunity to be actively involved in shaping the changes.

• Effective communication is coherent, or logical and consistent with the organization’s stated values and traditions. Management actions need to be consistent with what they say.

These lessons would be helpful to deal with the pressures of the financial crisis confronting many organizations.

About the Author

Kim Harrison is a recognized authority in the public relations field. His website, www.cuttingedgepr.com, provides a wealth of informative articles and resources on public relations techniques and management.