Month: July 2019

While engaged in recent networking activities I became acquainted with a Senior Consultant assigned to the Atlanta office for a National Outplacement Company.  He had heard about ITB Partners and wanted to learn more about our program.  During our discussion, I asked about their activity level, given that the economy has improved, and unemployment had reached a historic low.  I was somewhat surprised to learn that their business was still strong.  He said that, notwithstanding the strength of the economy, many companies are reorganizing their workforces to better serve their customers and achieve a competitive advantage.  I found this interesting and made a mental note to explore the issue further as I thought it would be a good topic for an article.  Two weeks ago, my health-care-consultant-friend and colleague, Faith told me that she had just finished an engagement to help a client through a major reorganization.  That triggered the memory of my conversation with the Outplacement Consultant so I asked her if she would like to collaborate on a blog post.  I find it interesting to learn how large companies endeavor to maintain a competitive advantage as we transition further into the Digital Age.

Executing a restructuring program is a complex endeavor that includes the risk of lawsuits and unintended consequences.  The risk profile increases with the scope of the program and the number of employees affected.  To minimize risk, major companies create a comprehensive plan that justifies the business case for the reorganization; evaluates alternatives to achieve their goals; and establishes criteria for employee termination or reassignment.  The Corporate General Counsel is a key player to ensure compliance with Federal and State Laws.  Additionally, the plan will include an analytical process to ensure that the impact of the reorganization doesn’t disproportionately affect protected classes of employees.  A labor economist can perform this role.  The written plan and documentation of the reorganization is necessary if required to defend a lawsuit.

Experts in the field of Corporate Reorganization advise their clients to think creatively when considering a reduction in force.  This intrigued me as I’ve witnessed the failure of many reorganizations.  Often, projected benefits were never realized as they were offset by lost productivity and poor customer service, ultimately dampening brand value.  From my perspective, lost institutional knowledge wasn’t adequately considered which led to subsequent re-staffing, including a certain number of rehires.

Talking this over with Faith, she told me that her client had set an objective for a 10% reduction in workforce (RIF) and process improvement realignment (PIR) effective January 1, 2020.  The median years of service for their Care Advocates are eight years.  During those years they’d learned how to navigate internal systems and politics, providing maximum value to the company and its clients.  In response to the directive, the client wants to ensure that their Care Advocates are happy and fulfilled in their current position.  Furthermore, they want to retain their institutional knowledge to the extent possible.

It is essential that their employees are engaged and thriving as that brings about the best patient outcomes.  People thrive when they can contribute and receive value.  The most significant contributors are those who feel appreciated and part of a greater good. They identify with the organization and what it’s trying to accomplish. It means the organization functions efficiently, with higher productivity and lower cost.  So, it’s imperative that employees are in the right position and feel appreciated for the effective use of their talents.

Faith said the RIF/PIR process began by offering all employees an opportunity to take personality profiling diagnostics to unlock suppressed interests.  This information helps dedicated Senior Recruiters direct them to opportunities in other departments.  These Recruiters will connect them with other hiring managers and inform them of relevant postings on internal job boards.  A structured communication strategy was designed to keep the Care Advocates informed of the status of the plan.  Finally, Care Advocates receive assistance if they want a severance package to seek opportunities outside the organization.

To summarize, Faith said that corporate realignments can be challenging.

Management is well advised to minimize risk by retaining as much institutional knowledge as possible.   Employees should ensure they are contributing to their position and to the overall mission, vision, and values of the organization.  If they lack a personal sense of fulfillment, they should consider looking for other positions inside or outside the organization.  The Health care sector embraces change.  Motivated employees should do the same.

For further reading on Restructuring and Reduction in Force, check out these articles.

https://stephanierthomas.blogspot.com/2010/02/planning-and-executing-reduction-in.html

http://www.klgates.com/files/upload/Presentation_RIF.pdf

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Jim Weber, Managing Partner

ITB PARTNERS

Jim.Weber@itbpartners.com