JMMB Shares Pointers on Reducing Negative Impact of Downsizing on Employees & SMEs
The country's unemployment rate as at October 2020, stands at 10.7% of Jamaica's labour force; that is, over 137,000 individuals are unemployed, according to the Statistical Institute of Jamaica’s (STATIN) quarterly report. This is an uptick of 3.5% year-over-year, and has largely been attributable to the slowdown in the economic activity, due to the impact of the COVID-19 pandemic. Shifts in the marketplace, have left individuals grappling with how to thrive in the current market and beyond, because of the rapid pace of change.
During a recent online seminar hosted by the JMMB Group’s Small and Medium-sized Enterprise (SME) Resource Centre, Joni-Gaye Cawley, human resource (HR) consultant, shared pointers with small and medium-sized business owners on how to navigate downsizing and manage its negative impact on employees.
The HR consultant encouraged SMEs to explore all options to retain valuable talent, to ensure that their businesses are able to survive, and are poised for growth, as they tap opportunities when they arise. She outlined that although downsizing is an ill-fated spill-off of the pandemic and its effects are debilitating, the economy will eventually recover and grow. It is against this background that she urged the business owners to explore a range of cost-containment measures, including: hiring freezes; work-from-home to reduce overheads; reduce plant size or relocate; decrease working hours; pay cuts and lay-offs. “As employers, redundancies should be your last resort, after you have explored and tried all other options,” shared Cawley, noting that the exercise also has major short-term financial implications.
Cawley highlighted that the labour laws provide clear guidance on lay-offs and redundancies, pointing to the Employment Termination and Redundancy Act, for reference. Lay-off is a period in which employees are without pay and these employees are still considered as employed to the company. After 120 days of being laid off, the employee may elect to be regarded as being dismissed because of redundancy, which would require employers to provide financial compensation. Redundancy is a permanent separation of employees for reasons beyond their control.
Strong leadership and reassurance is key to navigating this period, shared the HR consultant, especially in light of the many uncertainties. She charged the business owners to communicate clearly with employees, advising them of the current plan and possibilities for the future, while also sharing the financial position of the business. “There is no shame in your game,” she reassured the entrepreneurs, as she outlined that this is not an indictment on the company’s leadership or capabilities, but is largely a function of the challenging business environment.
For companies that a redundancy exercise may be the best option, Cawley shared the following guidelines:
• Make a redundancy plan, at least several weeks in advance and share it with all employees, before executing. The relevant trade union/s or employee representatives should be consulted when making this plan and to gain buy-in.
• Maintain clear and transparent communication about the redundancy exercise, to minimize further tensions and stress. In underscoring the need to manage the process delicately, Cawley shared, “It might be tempting to communicate the decision (to affected employees) via phone, email or text message, just to avoid the discomfort of having a face-to-face discussion; but termination of employment by way of redundancy is a sensitive subject and must be handled with care and consideration for the dignity of the employee.” Even in the period of social distancing, the HR consultant recommended face-to-face meetings, where possible, or at least online meetings (with cameras), with the affected employees, in a private space, to discuss the next steps, compensation and benefits to be retained and support services. “This gives you the opportunity to not just share information, but also allows you to read the employees' body language.”
• Employees who have been employed to a company for more than two consecutive years are entitled to compensation, including redundancy payments and notice pay. Where employers have a challenge making redundancy payments, the company can propose a payment plan to employees, for consideration.
• Business owners should provide professional and emotional support, in the form of outplacement services, to employees who are separated from the organization, to assist in making the transition process more seamless and manageable.
• Inform the Ministry of Labour by letter within 21 days of the redundancy exercise, outlining the number of affected employees, redundancy payments and posts held and other contact details.
• An often overlooked part of the redundancy exercise is, engagement of the employees who remain with the organization. Cawley encouraged business owners to keep their team engaged through team-building exercises and maintain open communication of future development in the organization; reassuring the team, without guaranteeing the future in the ever-changing environment.
Business Owners Encouraged to Take Care of Mental Health
The HR consultant acknowledged that typically, the focus of redundancy exercises is on the employees; however Cawley noted that redundancies can also take a toll on employers, especially small business owners, as these businesses tend to operate in a close-knit way, and the team is more like a family. Additionally, since the team is smaller, each member may play a pivotal role in the company’s development and successes. As such, she urged the business owners to take care of their own mental health, with exercise; professional counselling, if necessary; tapping into their support system of friends and family and utilizing other stress relief techniques. She also outlined the need to remain optimistic and opportunistic in the dynamic environment, as keys to navigating the downsizing process.
An upcoming seminar is slated for Tuesday, April 13, with talent & culture management consultant, Diana Burgess, on the topic, ‘Creating a Winning Company Culture’. For details on the upcoming event and to register, SME owners and managers may see JMMB Group’s social media pages.
Shani Duncan Falconer, senior corporate manager, JMMB Group SME Resource Centre said, ”The online series, organized by the Centre, on a monthly basis, seeks to engage clients and other SMEs, while sharing expertise and financial solutions.” Adding, “It is also designed to encourage SMEs to be more intentional about their business success; take actionable steps; identify best practices and resources; and create and/or revise plans, so that they can put the necessary infrastructure, policies, systems and expertise in place, for their sustainability and growth.” The series has thus far, explored a range of relevant and topical issues, including: taxation; digital marketing; accounting in a digital space and financial management. The topical seminars also underscore the commitment of the company to nurture, grow and scale SMEs, by providing holistic financial solutions, expertise and advisory services.