Tech Mahindra firing: CHRO’s call for ‘Downsizing with Dignity’Downsizing is inevitable, but it has to be done with dignity else unions will play their role. CHROs spoke to HRKatha on several lessons from the entire episode.
Last week, one HR executive at Tech Mahindra callously ordered an employee to resign the very next morning before 10 a.m. or else be prepared to receive a termination letter! An audio clip of the conversation went viral. While this saw the top bosses of the company publicly apologising for the act, it raised many concerns— not just about the fate of various other employees in the industry, but also in general about the way layoffs are handled.
While it was at first easy for the organisation or the HR executive to blatantly tell the employee to leave, it may not be as easy to regain the lost trust and reputation. While it was smart on the part of the employee to have recorded the conversation, his career certainly is at stake now. Will Tech Mahindra’s apology change things for good or is it just a soul-saver following the damage that has already been done to the company repute? Are organisations sensitive enough to be able to tackle layoffs in the softest possible manner? Is HR empowered or thoughtful enough to stand up for the employees, when management takes tough decisions?
In 1997-98, the then HR head at HP stood by the employees when the company decided to shut down one of its manufacturing facilities in Bangalore. Instead of simply telling people about the decision to shut down, this HR head took the initiative to visit several other companies himself, seeking suitable opportunities for people.
Rajesh Padmanabhan, director & group CHRO, Welspun, says, “Business realities will never cease to exist. Hence, it is extremely important that such situations are handled in a balanced way. The approach needs to be fair, wherein HR executives or organisations listen to what the employees have to say.”
Furthermore, he believes that empathy is the key to establishing harmony and ensuring that sentiments are not hurt in the process. Padmanabhan is of the opinion that, “Such conversations cannot just take place between the HR executive and the employee.” He believes it should be a tripartite discussion, also involving the manager.
Firing an employee is not just about letting the person know of the management’s decision. It involves dealing with a person whom you’re just about to put in a difficult situation – so it is the responsibility of HR to deal with it carefully and humanely. Emmanuel David, director, Tata Management Training Centre (TMTC), Tata Group HR says, “Downsize with dignity.”
In line with the same, Chandrashekhar Mukherjee, group chief people officer, Srei says, “It is important to maintain the dignity of the employee concerned and of the organisation. Organisations need to be empathetic and provide some time and space to the employee to be able to absorb the decision.”
Clear, transparent and supportive communication is a critical element in ensuring that minimum damage is done in such cases. More so, in the digital age, where face to face connect has become a rare event, it is important for HR to recognise the need for a human connect.
“Such conversations cannot just take place between the HR executive and the employee. It should be a tripartite discussion, also involving the manager.”
David is of the view that firing should not be viewed as an operational task, but a critical responsibility that involves a human and his livelihood. “When an organisation hires, they hire an individual but when an organisation fires, they fire an entire family,” he says.
Having said that, there is actually a lot that organisations can do to ensure that minimum damage is done in the process of cutting jobs. They can support the affected employees in outplacement or offer them extended notice durations or other monetary or non-monetary support.
Sharing his own experience, David describes how the then HR head at HP, back in 1997-98, stood by the employees when the company decided to shut down one of its manufacturing facilities in Bangalore. Instead of simply telling people about the decision to shut down, this HR head took the initiative to visit several other companies himself, seeking suitable opportunities for people.
“When an organisation hires, they hire an individual but when an organisation fires, they fire an entire family.”
In another interesting anecdote from his own past experience, David explains how HR can play a crucial role in finding alternate routes to downsizing, benefiting both the organisation and its people. “It was in 2001 or so, when Volvo reviewed its stock of trucks and realised that the production was more than required. Hence, the company decided to slow down on that front, consequently deciding to cut down on the production staff,” he says. It was the HR team that intervened at that point. After some significant discussions with various other teams, it was realised that more than cutting down on people from production, there was a need for resources in the after-sales service team to boost business.
Following those discussions, HR spoke to people from the production team and persuaded them to move into new roles in the after-sales service team, promising re-skilling or up-skilling support. “Having given a choice, surprisingly, most people decided to stay with the organisation agreeing to move into new roles,” David shares.
“HR of the day certainly lacks IR capabilities as they existed a few years ago.”
There are a few evident lessons that HR can draw from David’s stories. First, HR needs to have a business connect to be able to come up with resource-management solutions that are beneficial to the organisation, and yet, balance out on people’s expectations from the company. Second, HR at times, needs to have the courage to stand up for the employee rather than blindly following the instructions of the employer.
As Padmanabhan aptly puts it, “HR needs to know how to balance the employee and the employer, and at times, even stand up for the employee if need be.” Clearly, in a conversation that involves a layoff, the focus of HR should be on minimising the shock and helping the employee understand the organisational objective, along with offering the best possible support for outplacement. Or else, the organisation will risk losing out in the long run. “It’s about how HR can minimise the agony in such a situation, ”says Mukherjee.
The way the recent Tech Mahindra case was handled is also one of the reasons why the IT industry is witnessing a rise in employee unions in modern times. “HR of the day certainly lacks IR capabilities as they existed a few years ago,” Mukherjee adds.
He is of the view that HR should track and keep a record of the employee in terms of health risks or medical conditions, financial burdens, family dependency, and so on. After all, these are things that could get impacted because of the company’s decision. HR should then act accordingly while sharing news of the layoff, Mukherjee explains.
Last but not the least, Padmanabhan feels that organisations need to sensitise and train their HR to handle such situations better and at the same time employees too need to be aware of their contract which is mutually signed and accepted in principle and spirit and when pushed unilaterally, how to face and handle it right. HR owes it to both employer and employee in equal measure and needs to stand up as true custodian and conscience keeper at all times. “A one sided approach will result in credibility loss and will have long term engagement impact,” he concludes.