Have to Downsize? Do It with Dignity

From a few to a flood, the number of layoffs by Asian businesses continues to mount. Whether you describe it as downsizing, or call it the sack, it all boils down to people, and careers, and families, getting hurt. Personnel managers - or human resource departments, their all-too-often inhuman successors - have a duty to deliver the goods gently and fairly.

Practices such as dismissal notices tucked into final pay cheques, a chilling group email or the human resources lackey gathering the unlucky employees together in a room should be obsolete.

Senior executives, or the owner in the case of small businesses, should break the news. Caring managers should abandon detachment for a more explanatory route, explaining why tough times have taken their toll and encouraging voluntary leave. If dismissals are unavoidable, laid-off employees should be encouraged to keep in touch with each other, their supervisors and those workers that stay.

If executives see such interplay as maudlin or insincere, they should consider practical reasons for letting workers go gently: they might well need them back. The American Management Association reported that half of all companies tend to overreact when downsizing. Indeed, in recent months, Asian-based units of companies such as Fujitsu, Dow Jones and American Express have had to rehire employees because of overzealous layoffs.

And those are just big firms. The situation is even more acute at small and medium-sized businesses, where each employee represents a greater proportion of the sum of the whole enterprise. "If you cut the people who provide your ideas, you are in trouble," warns Cary Cooper, a principal of business psychology consultants Robertson Cooper in Manchester, England.

Another reason for the soft touch is assuaging the remaining employees. Their future can be determined by how their employer handles layoff announcements, treat employees as they leave and communicate with those left. A company that downsized brutally will find that those workers remaining are only waiting for a better economy for the chance to jump ship to a more compassionate competitor.

Of course, even better advice is to cut staff only as a last resort. Before reaching for those pink slips, review performance and business strategies. Make a frank assessment of management. Observed Cleophina Chan, a consultant at OpenTide Asia in Singapore: "With the current downsizing trend, companies risk the loss of valuable information and knowledge each time an employee leaves."