Redeployment and Upskilling Should Be Priority Before Turning to Layoffs in a Recession, Says HR Advisory Firm McLean & Company

Times of crisis put leadership to the test, and the window for acting on redeployment is small. HR teams and leadership must be intentional to avoid relying on layoffs wherever possible

Amid signs of an economic recession, organizations across all industries are re-evaluating costs, resources, and options. McLean & Company, the trusted research and advisory partner for HR and leadership professionals worldwide, is recommending that HR professionals and leaders focus on redeployment opportunities as the primary solution when considering cost-cutting labor initiatives. To support HR teams and business leaders in their efforts to reduce costs in times of economic downturn while maintaining a positive employer brand, the firm has published its industry resource Redeploy Your Workforce During a Crisis.

“Layoffs are often the first cost-cutting option organizations resort to in times of economic crisis,” says Karen Mann, vice president of HR research, learning solutions, and advisory services at McLean & Company. “However, during a crisis, many parts of an organization change frequently and rapidly, and all areas aren’t impacted in the same way. This presents an opportunity to redeploy employees to areas of need instead of laying them off, which will better position the organization to return to normal once they’re no longer in crisis mode. It also decreases the likelihood of damaging the employer brand. This is playing the long game.”

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When the economy is negatively influenced by factors beyond any organization’s control, the impact can be felt almost immediately on the bottom line. This decline in revenue as a result of a weakening economy leads organizations to reconsider every dollar they spend to help secure the long-term viability of the organization.

“When a recession hits, organizations are often forced into reactive mode,” explains Mann. “When HR is in cost optimization mode, it’s important to keep in mind not only the organization’s immediate budget goals but also how to best position the HR department for a quick recovery post-recession.”

McLean & Company recommends HR teams and leaders follow a redeployment roadmap. The roadmap, outlined in the newly released resource, consists of three steps to explore opportunities to redeploy employees instead of using layoffs. These steps include:

1. Meet with leadership – HR and leadership must evaluate internal and external factors that will impact the organization’s viability, including supply chain, labor costs, revenue, industry trends, and delivery methods. They should also consider the degree of risk of continuing operations against the ongoing viability of remaining profitable. Additionally, it is imperative to identify which employee segments or departments are being underused versus which need additional resources. This can be done through the three key components of planning for cost-cutting:
   1. 1. Create a policy – The first step in workforce cost mitigation involves setting a clear direction. Leaders need to create a policy outlining the steps involved in cost-cutting.
         
         
      2. Investigate options – Leaders can then investigate all cost-cutting options and determine which is the most fitting for the organization.
         
         
      3. Cost out cuts – As a result, leaders will be equipped to create a plan for ensuring that they mitigate costs in the best and most viable way for the organization.
         
         
2. Plan individual and department redeployment – Leaders should identify employees that need to be redeployed and whether their skills may be leveraged in other organizational areas. This can be done by mapping out the critical skills required for departments and functions that need additional resources, and then assessing whether redeployable employees have these skills. Next comes the creation of a high-level action and communication plan to support redeployment initiatives, followed by training and support for redeployed employees.
   
   

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1. Monitor and manage departmental effectiveness – To properly monitor departmental performance, leaders must review key metrics by department, determine the impacts of redeployment and layoffs if required, and categorize departments based on performance. On a greater scale, organizational performance should also be reviewed regularly. This will assist HR and leadership in determining if current solutions are effective or if the response needs to evolve to accommodate the organization’s situation.

McLean & Company’s research emphasizes that redeployment should be an organization’s priority solution when cost-cutting initiatives must be considered, while layoffs should be pursued as an unavoidable, final course of action. While HR leaders and leadership are planning for the worst, they must navigate through the uncertainty and ambiguity with resilience and plan how to recall laid-off staff and return redeployed staff to their prior roles, if applicable.

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