Bad News Blues

1. Bad News Blues Employee Communications in an Uncertain Environment Dan Tipton President, Tipton Communications www.tiptoncommunications.com

2. HR has Difficult Task • Benefits reductions • Layoffs • Increased focus on alternative work arrangements and other ways to reduce payroll without layoffs • Retirement plans are not what they once were with stock market volatility. • Employees are on edge.

3. News Headlines:Good Reason to Be Uneasy • Jan. 27, 2009 – 78,000 layoffs announced nationwide • "Anybody who holds on to believing that 2009 is the bottom is dreaming.“ Wall Street Journal, Feb. 20, 2009

4. News Headlines:Good Reason to Be Uneasy • “Stingier severance adds to workers' woes” • “Loath to lay off, bosses freeze pay, cut employee benefits” • “Lean Times Call for Cutbacks in Health Care Benefits” • 335 articles in past week on recession and impact on employee benefits

5. Effective Employee Communications is Critical • Our job—in any employee communications role—is to reduce uncertainty. • Uncertainty is the great workplace (and personal) evil. • Uncertainty reduces feelings of stability and constancy and can force people beyond their mental and even physical capabilities.

6. Strategies for Communicating During Uncertain Times • Don’t assume that employees will readily understand that outside events are affecting the company. • Don’t discount the organization’s vulnerability to the challenging economic times. • Don’t assume that employees will know what to do or will react logically. • “At least I have a job.”

7. Strategies for Communicating During Uncertain Times • Recognize that communications at this time is especially critical. • Reinforce company commitment to employee communications by setting specific goals for the company and senior managers. • Distribute the goals to all employees.

8. Strategies for Communicating During Uncertain Times • Example of company communications goals: • We will communicate proactively and in a timely fashion. Our employees will learn about major strategic or tactically at work and not through the internet reports, newspapers or other external sources. • Our senior management will be actively involved and visible throughout the company. • Information provided will be as comprehensive as possible. We will find answers to employee’s questions as soon as possible. • We will use multiple communications forms and channels, but maximize opportunities for face-to-face communications, particularly for those who immediate job functions are changing.

9. Tactics for Communicating Change • We have lots of practice communicating change. • Change and uncertainty is not something new. • Business is about change: • Reengineering • Restructuring • Transformation • Renewal • For example, medical coverages have been steadily reduced over the years as costs have increased.

10. Tactics for Communicating Change • Base Your Tactics on Principles of Communicating Change: • Immediate managers and supervisors are the most trusted source for information. • The critical role of Senor Executives. • Focus on the impact of the change in the local work area. • Tell employees and managers what you know as soon as you know it.

11. Communicating Bad News • Develop overall strategy on how to manage “bad news” even if not imminent. • Have a well-defined severance plan already in hand. • Begin and end the layoff period in as short a timeframe as possible. • Avoid the pitfalls: • Tell employees what is happening as soon as possible. • Don’t act like nothing happened afterward.

12. Communicating Bad News • Treat employees as humanely as possible. • Use face-to-face communications as the primary communications tool. • Notify people, if possible, before a general announcement and always before a public announcement: • “We told people, one-on-one, in person, explaining it to them so they knew first, rather than doing a whole announcement and then tapping people on the shoulder.”

13. Communicating Bad News • Treat employees as humanely as possible. • Arm front-line managers with all available information. They will be doing the hardest work. • Provide managers with the company story on the layoffs and express compassion for those who are losing their jobs. • Help out those who are laid off as much as possible.

14. Communicating Bad News: Suggestions from the Trenches • “The best advice is to be very clear and direct.” • “Make it clear to the employee that the decision is final.” • “Talk about the economic climate and reinforce that the company did not want to do the layoff, but had no other choice.”

15. Communicating Bad News:Suggestions from the Trenches • “Our IT division was called together for a meeting and our CTO discussed the challenging times for our industry and our company. He then went on tell us we were not getting raises for 2009. It was large group but there was time for questions. Hearing it first-hand before the rumors went out was very important to me.”

16. Communicating Bad News: Suggestions from the Trenches • “I have never liked these meetings, but I found that, like anything else, if you are prepared they go so much better. Here are some of the things I do: • Script Q&A to ensure that all managers on my team are using the same messages. • Ensure communications is timely and in person. • Be absolutely candid. People want to know the truth; they don’t want it sugar-coated and you don’t want to give them false hope. • Provide context on the business. Discuss the economic or business situation that is causing the layoff and when you expect it to turn around. • Secure a private room or office for the meetings. • Expect any/all ranges of emotion. • Show compassion but be firm. • Have a positive attitude!

17. Communicating Bad News: Suggestions from the Trenches • “I used to have to deliver this news quite often and my number one suggestion is to make sure the announcements are timely. • I have seen too often where companies have announced that there were going to be layoffs and then did not announce the areas that would be affected for several months. What a distraction to the people and the business!”

18. Communicating Bad News: Suggestions from the Trenches • “Boy have I had practice with this lately! • Communicate what you know as soon as you can share it. Pull people together no matter how distracting it is or how many times you have to do it. • Answer the questions directly, don’t beat around the bush. • Look the people in the eye when you are talking to them. • Don’t give people a false sense of hope. • Be visible.