Few scenarios have challenged employers in recent years as much as the COVID-19 pandemic. As the virus has continued to surge worldwide, and especially in the United States, organizations have faced tough decisions about whether and when to lay off workers and how much transparency they should provide about these reductions in force.
But organizational transparency has been an issue for workers well before the pandemic. A 2019 study of 1,000+ U.S. employees by Dynamic Signal found that nearly two-thirds have considered quitting solely because of deficient workplace communication. Companies with low levels of transparency may suffer from impaired productivity, increased gossip and suspicion, lack of trust and accountability, and employees who feel they are in the dark and not being heard.
Organizational transparency provides far more benefits than risks. Experts point to increased productivity, greater accountability, a stronger workplace culture, and greater engagement and empowerment among employees. In addition, candidates are drawn to companies with a reputation for transparency.
According to management gurus, stellar organizational transparency requires a blend of the following:
Tim Clark, writer for collaboration-software platform LiquidPlanner, makes what may seem to be a no-brainer suggestion: “Ask employees what information they need, then get it for them;” yet surveyed workers complain of communication breakdowns and fragmented information. In a profile of the collaboration-software company Asana about the firm’s transparency, Lydia Dishman quotes co-founder Justin Rosenstein’s transparency definition: “For us, transparency is providing as much information as [an employee] needs to act in the best interest of their team, the company, and its mission as a whole.” Project-management and collaboration software platforms are seen as promoting open-work processes. It’s not a coincidence that both LiquidPlanner and Asana promote transparency given that they are purveyors of these types of platforms. (Others include Zoho, Podio, Slack, LeanKit, Airtable, Basecamp, Trello, and Wrike.)
Executive leadership must be on board with what the Asana co-founders call “transparency ’til it hurts.” Transparency must be ingrained in the culture and specifically addressed in policy. “Be consistent with transparency,” writes management consultant Stuart Hearn, “and keep it in mind when it comes to every decision – major and minor – that affects your company.” Every aspect of the organizational culture should convey that your company considers transparency important.
Employees should be given context and a rationale behind decisions when being told about company matters. It can also be impactful for employees to grasp the financial ramifications of decisions – from the true cost of mistakes to the potential rewards of innovation. Employers can go beyond simply explaining decisions to involving their employees in the decision-making process. Even if not directly making company decisions, junior employees, blogger Paul Crosby suggests, can be “invited to attend important meetings to learn from veterans and feel like they’re getting a behind-the-scenes experience.” Employers can choose to trust employees to make decisions about their own work domains. “When important information is accessible,” notes Asana blogger Kasey Fleisher Hickey, “everyone will understand the goals of the company and feel empowered to make better decisions independently.”
Consider sharing the good, bad, and the ugly when it comes to organizational outcomes and results. Being as upfront about failures as you are about successes builds trust and confidence with employees. Keeping employees apprised of the state of the company will also better help prepare them if failures ultimately result in cutbacks that affect them, because they will not see these decisions as personal.
Especially when practicing transparency in delivering bad news that affects employees, organizations must anticipate what questions workers might ask and be prepared to respond to those questions. Leaders should not be afraid to admit when they don’t know or aren’t sure of the answer and must express willingness to find the answer and convey it to the questioner. Creating an infrastructure to handle tough questions and concerns can be effective. While it may not be productive to seek employee feedback in every situation, providing regular opportunities for them to give input and feedback will help them to feel heard.
Especially when practicing transparency in delivering bad news that affects employees, organizations must anticipate what questions workers might ask and be prepared to respond to those questions. Leaders should not be afraid to admit when they don’t know or aren’t sure of the answer but must express willingness to find the answer and convey it to the questioner. Creating an infrastructure to handle tough questions and concerns can be effective. While it may not be productive to seek employee feedback in every situation, providing regular opportunities for them to give input and feedback will help them to feel heard.
Here, we return to the COVID-19 pandemic and its ensuing layoffs. Several experts use the phase “treat employees like adults” when referring to conveying bad news, such as layoffs. “There is nothing worse than being blindsided by a company’s decision to make cutbacks when you were in no way prepared for such measures,” writes Darren Perucci, content manager for BambooHR. Delivery of layoff news should not be delayed and should not be delivered en masse, but rather individually.
When bad news affects workers, the human element is important. “The best and most people-centric approach to layoffs,” suggests journalist Bryan Clark, “is to think about the people facing the sudden prospect of unemployment” and to remember they are, in fact, people, and not statistics. Experts advise HR departments to plan for transparent layoffs before they become necessary.
Transparent messaging about the layoff should include financial background and a description of other cost-cutting strategies that were considered before a layoff decision was reached. The list of questions Susan Peppercorn proposes in a Harvard Business Review article that employees should ask HR when they are laid off provides a guideline for the type of “how does it affect me” information that should be included in a transparent layoff message:
• Timing of layoff, including last paycheck
• What happens to unused vacation time
• Whether severance pay will be provided
• How stock options, equity, and 401k will be handled
• Options for healthcare coverage
• Whether a reference will be provided
Employees should also be provided with a way to ask questions and raise concerns, as well as resources on topics such as unemployment, outplacement, and mental health.
If your organization is going through a layoff, reach out to us at TheCareerStrategyGroup.com.