Layoffs or No Layoffs, Employees Come First

Whatever side of the layoff story you find yourself on — now or in the 187065451 -- layoffsfuture, conducting them or avoiding them at all costs — don’t ever lose sight of your employees’ experiences.

That seems to be the collective message of two articles I came across recently, written on the same day, no less. One, from the Harvard Business Review site, written by the chief executive officer of Scripps Health, Chris Van Gorder, trumpets that company’s no-layoffs policy.

The other, from the Society for Human Resource Management site (registration required), details Target Canada’s recent “unprecedented” move to offer a $70 million severance package to the some 17,600 employees who are slated to be laid off by mid-year 2015 as the company exits the Canadian retail market.

A more recent HREOnline news analysis by Senior Editor Andrew R. McIlvaine, “Cushioning the Blow,” highlights the merits of giving severance to everyone. In that story, Sanjay Sathe, founder and CEO of San Jose, Calif.-based outplacement consultancy RiseSmart, is quoted saying that, “if the No. 1 goal of severance is to take care of employees, then the practice should be to offer it to all employees.”

Without a doubt, taking care of employees is at the heart of both the Target and Scripps Health examples mentioned above.

As Brian Cornell — CEO and chairman of Target’s U.S. parent company, Target Corp. — says in a statement:

“We do not take lightly the impact that our decision to discontinue operations in Canada will have on Target Canada’s team members who have worked tirelessly to make improvements to the guest experience. That is why we took the unique step of establishing the employee trust.”

More specifically, that’s why his company has set up a trust fund for employees to receive 16 weeks of pay, an amount that will be kept separate from Target’s restructuring process. Lisa Stam, a partner at Koldorf Stam in Toronto, calls the severance amount “unprecedented.”

Anil Verma, director of the Centre for Industrial Relations and a professor of human resource management at the University of Toronto’s Rotman School of Management, tells SHRM it’s “unusual” for a company to protect its employees with a trust fund. In his words:

“[Laid-off employees] will also accrue certain benefits, such as medical and life insurance. This act demonstrates that Target is a good employer.”

In defending his decision to establish a no-layoff policy, which “isn’t the norm in my [nonprofit] industry,” Van Gorder shares his belief that “a no-layoffs philosophy is good for employees’ physical and psychological health.” As he puts it:

“I’ve seen what it’s like to carry out mass layoffs — I had to do that in the 1990s at a hospital that was in bad financial shape. I vowed never to let myself get into that position again. Instead, nonprofits need to match institutional discipline with authentic good will toward employees, developing effective employee-assistance and wellness programs and eliminating anxiety about job security.

“Who knows? If enough nonprofits master this balancing act, then maybe we can teach the for-profit world something for a change. … In today’s economy, organizations are supposed to treat employees almost as free agents, with low expectations of loyalty on either side. … But paternalism works — even in the 21st century, and even in an industry undergoing disruption.”

Just some food for thought, I thought.