The Cost of Doing Business

By Clyde C. Lowstuter

TransitionA recent Wall Street Journal article (2/18/14) reported on the commoditization of career transition services. The article, entitled “Assistance for Laid-Off Workers Gets Downsized,” highlighted that career transition services generally being offered by companies are now at an appalling low.

What’s the impact of downsizing?

When companies downsize their operations, there are a myriad of factors to consider, such as existing contracts for real estate, raw materials, equipment leasing, bank covenants, and work force costs, to name a few.  All contracts have obligations, yet the one relationship that seems less binding is human capital.  While companies may have every right to terminate someone, they rarely think through the widespread adverse impact such terminations have both on people and the organization.  When companies significantly scale back on career transition services, personalized career guidance is sacrificed in favor of services that cost little and offer even less. Such negligible support has a decided negative impact on departing executives . . . and their families. Exited executives are often shocked and embittered to learn how little regard their employer feels for them after they significantly contributed to the organization’s growth and profitability over the years.

So what?  Why should companies care? 

It makes imminent sense that when looking to reduce operational costs all non-essential spending is carefully scrutinized. To that end, it is easy to justify trimming career transition services and separation benefits.

Most customer-facing companies have studied the impact their public persona has in light of how they act in potential tense moments in their organizations.  The rule of thumb is:  satisfied customers tell 3 people of their experience; dissatisfied customers delight in telling 10 people never to shop there again, given how poorly they were treated.  Similarly, disenfranchised employees can greatly tarnish a company’s reputation.

How does it benefit companies to spend money on exiting employees?

What top executives are forgetting is that loyalty is not one-sided. If a company does not care enough to support exiting employees in a meaningful way, why should current employees care about the company by extending themselves – staying late, working weekends, giving 110%?  By short-changing their exiting staff, companies  inadvertently telegraph to their current employees that they really don’t matter.

Predictably, top contributors in companies keenly observe and silently reflect on how their colleagues were treated.  Indeed, these talented executives are often the first to voluntarily exit on their own terms. Their reasoning is hard to fault:  if the company isn’t loyal in treating exiting people well, then why should these leaders be undeservedly loyal to the company?  Tragically, the time when organizations need remaining employees to contribute even more, is the time when many employees are brushing off their resumes and initiating calls to recruiters.

Make your people matter.

Since 1981, R|L has chosen to provide unparalleled career transition support to senior executives and their staffs.  We are on the road less traveled, addressing the needs of our clients the way we would want to be treated.

Two roads diverged in a wood, and I –
I took the one less traveled by,
And that has made all the difference. 
“The Road Not Taken,” Robert Frost, 1874-1963

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This Post Has One Comment

  1. Congratulations on NOT taking the “auto pilot” approach to career transition.

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