Layoffs are Your Moment of Truth

Layoffs Are Your Moment of Truth
By Jill Evans Silman, SPHR, SHRM-SCP, Senior Performance Consultant, Insperity

As Jack and Suzy Welch once wrote, "HR matters enormously in good times. It defines you in the bad."

In this tumultuous time, so many industries face extreme change. If there was ever a time to underscore the importance of HR, it has arrived. As the world goes through turmoil and so many industries face extreme change, what exactly is HR’s role now—especially in terms of layoffs?

We visited recently with Sherri Lee who has spent the last few years preparing for the eventual closure of a business that at one time employed more than 10,500 from its Houston headquarters to operations in DC, Florida and Alabama. Only recently transitioning from employee to consultant, Sherri spent the last 12 years in HR at United Space Alliance. As mentioned, during her tenure the organization peaked at roughly 10,500 employees. That was before the announcement of the dissolution of our country’s Space Shuttle Program.

With the news of layoffs and reorganizations making headlines nearly every day, we thought it would be apropos to sit with Sherri as her experiences provide a framework for others faced with this moment of truth within in their own organizations.

Jill: Sherri, give us the background of your organization.

Sherri: United Space Alliance (USA) is a Limited Liability Company (LLC), equally owned by The Boeing Company (NYSE:BA) and Lockheed Martin Corporation (NYSE:LMT). Formed in 1996, it consolidated more than 30 heritage contracts that supported the Space Shuttle Program. United Space Alliance’s successes include work on the Space Flight Operations contract (SFOC) and its follow-on, the Space Program Operations Contract (SPOC) as well as the Integrated Mission Operations Contract (IMOC). Under these contracts, USA served as NASA's primary industry partner in human space operations for the day-to-day management of the Space Shuttle fleet, including the planning, training and operations for 55 Space Shuttle missions and more than 35 International Space Station (ISS) increments. At its peak, United Space Alliance had over 10,500 employees who directly supported the Space Program.

United Space Alliance began implementing processes and planning strategies as early as 2008 in preparation for the eventual termination of the Space Shuttle Program, targeted to occur in 2011. Termination of this program would eventually affect the great majority of the 10,500 employees who worked for the company.

As of last fall, USA no longer holds active contracts and is not pursuing future contracts. However, USA will continue to operate in an administrative business capacity to manage government contract close-out requirements.

Jill: Tell us about your role.

Sherri: Since 2003 and until recently, I served as Vice President of Human Resources, Administration and Communications for United Space Alliance, advising Sr. Leadership and directing HR strategy and operations for the Human Resources, Security and Communication organizations. I still have a staff of 5 HR people who are working company closeout activities and we have continued to restructure our processes to support a smaller company for the next 3-5 years. In March, I left USA as an employee, but will remain as a consultant to the company as we terminate programs.

For the bulk of my career with USA, I led a 65 person HR team which included Staffing/Recruiting, EEO and Compliance, Compensation, Benefits, HRIS, Employee and Labor Relations, Training (including technical training), Security and Company Communications. I focused my efforts on reengineering HR from a transactional/administrative function to a strategic customer-focused business partner with the mission to improve HR effectiveness and communication.

Jill: Over the past few issues of HRMatters, we’ve asked Texas HR icons and influencers like yourself to make their predictions for how HR will redefine the workplace. But, Sherri, can you speak directly to the point of HR’s impact when companies are downsizing/rightsizing/re-engineering? What exactly is HR’s role now—especially in terms of layoffs?

Sherri: After the Presidential announcement in 2004 that the Space Shuttle fleet would retire in 2011, it quickly became clear that Human Resources would play a critical role in the success of the transition of the Space Shuttle Program, its personnel and the culture of the workplace.

As early as three years prior to the targeted 2011 termination of the shuttle program, Human Resources took an active role in identifying key issues and bringing them to the Senior leadership team. While the issues had to be discussed, analyzed and addressed as a company, the initiatives and actions taken were largely led by HR. HR partnered with the management team to quickly design programs to support the main goal of safely and successfully performing the missions, and also address the three top concerns.

The first issue was the retention of personnel during the turbulent and uncertain times prior to the actual conclusion of the program.

Incremental reduction of personnel to meet budget targets would begin two years prior to the actual termination of the program in 2011, and reductions would continue for four more years after the last flight in 2011. The success and safety of the remaining Space Shuttle missions, and also the success of the International Space Station ground support work, was on the forefront of concerns for USA. To continue to perform safely and maintain schedule, the company needed the vast majority of their skilled personnel to stay in their jobs and work hard, until each employee’s individual job was scheduled to be reduced.

Retention Programs were developed in consideration of the concerns with the skilled labor performing the work. As the USA environment grew smaller, new issues surfaced, and the programs were often redesigned or revised to better address the concerns at that time.

The second concern was morale of the employees (including managers), during and after layoffs affecting their friends and coworkers and ultimately their own job.

It was critical to focus on maintaining, and even strengthening, an open environment of trust with the employees.

To address the morale of the employees, HR worked with management to provide consistent and reliable communication methods and well thought-out morale events. This included providing very detailed information on upcoming layoff events, identifying the work and departments that would be affected and when. This also included an intense training campaign to assist employees in obtaining the confidence, tools, and resources needed to search for a new job, well in advance of their scheduled departure date.

After-hour and lunch-hour classes where provided regularly over five years covering topics such as resume building, interviewing, job search and in some cases, retraining. USA HR built active relationships with, and obtained support from, local colleges and state placement agencies to provide information, counseling and training to thousands of employees long in advance of their actual layoff date.

Third, was increased risk of workplace violence, increased legal issues and manager/employee problems.

Sherri: Providing detailed communications/ information and job search training posed some risks, such as, employees opting to leave earlier than the company desired. However, the communications, the training and the severance programs all focused and encouraged the employee to feel prepared, not to panic or rush, because they could trust that they had the information and skills to successfully find a position when their specific job was complete.

We maintained several critical skills programs in place to encourage folks to stay. First, was an enhanced severance package for all employees. For our technical staff, we implemented a critical skills program in 2010 that was to be paid out upon layoff from the company. This fund payout was additional to the severance in which the employee was entitled. Within the last two years, we developed a similar program for our support personnel because that support population has become critical to the remaining close out activity.

Without an already established and trusting partnership between HR and management, the outcome would not have been as successful.

Throughout the transition of the Space Shuttle Program termination, voluntary employee turnover at USA remained well below industry standard and employees continued to perform at high levels. The positions held by our employees were in a variety of jobs: Engineers, Technicians, Astronaut Trainers, Mission Control Console Operators and support personnel. All were made to feel important in whatever role they individually performed, contributing to the success of the program.

Jill: How did you prepare and prioritize for this change?

Sherri: All business plans have to be developed in consideration of the skill base being increased or reduced.

In our effort to reduce staff over a period of five to six years, we knew there would also be public information that our employees would also receive, and perhaps be influenced to make decisions based on that information.

To combat that risk, employee trust had to be a focus and priority. Our goal was to develop a trusting relationship with all levels of USA management. In turn, we had to trust our employees, since we were providing them with advanced information and training to equip them to eventually leave USA.

An emphasis had to be placed on management training and communications. We instituted an in-depth management training program to equip managers to have frequent conversations and inquiries with each employee.

We embraced a culture of "we care". We cared about the program’s success, we cared about the people and we cared about safety. Our communications, training and problem identification campaigns were all based on the fact that we cared. We wanted the employees to care also, and they did.

Jill: So what are the takeaways?

Sherri: During times of growth or reduction, the culture of the company plays a role in the change, and may need to shift to accommodate the change that is occurring. During the five years of our reduction of personnel, USA had to evolve and change company practices, while maintaining the strong aspects of the culture. Multiple organizational and cultural changes had to take place as the environment and business needs changed. Work flow and processes had to change as staff reduced and duties were consolidated. Throughout my career in HR, I have evolved into embracing change, and making a true effort to be flexible and adaptable to the business needs and concerns at hand.

I have had the privilege of working with many great HR professionals throughout my career, in a variety of industries. In the past, I have seen HR develop and implement excellent programs and initiatives. However, often once implemented there is no system or desire to measure the effectiveness of the program in to relation to the business needs or employee needs. I have often observed that even when a practice or policy is effective for some period time, there is a real resistance to change or evolve the practice, even when that policy or practice may no longer make sense in the current business environment.

My advice to other HR professionals is to be the catalyst of continual evaluation and change. Although it is great to take pride in a practice, and consistency is important, evolving with the business in equally important. Review current programs and ensure they are aligning with the current goals of the business. Be willing to expend resources to alter and adapt policy and practices to the current work environment.

During the last five to six years, USA as a company had to evolve to the current environment demands in order to be successful. We had to embrace being a slightly different company each time a major reduction in personnel occurred.

Most people have a natural resistance to change, including management and some HR professionals. However, I have found having HR being open to and supportive of change allows them to be a true business partner.

MOMENT OF TRUTH

Once the termination of the Shuttle Program was announced, my biggest concern was not the tremendous effort that was in front of Human Resources, it was the retention of my own HR staff to stay and manage the task of reducing thousands of employees and supporting the changing needs of the company. I talked individually to each of them during that initial time, and throughout the transition.

One conversation comes to mind with my Employee Relations representatives, who were the front line contact with managers and the employees. I was most convinced that keeping this team intact was crucial. A top performer and leader in that group stated, "no one gets into HR to lay off thousands of people, and I am not sure I want to do that. Plus, you may leave and then what happens?"

It was a reasonable statement. After a few moments of thought, I told her that I believed that most people get into HR because they want to help others. Maybe they lose sight of that in their daily jobs, but if they think about it, helping people would most likely have been at least one reason for choosing HR as a profession. I shared my personal belief, that if you have the honor to help one person in life, your life has meaning. I responded, "This reduction is going to happen, with or without us. If we all leave they will bring in another group to work this transition and lay off personnel, but those new people would not know our employees and they wouldn’t care as much as we care."

We had an opportunity to help more than just one person. During the years of the transition, I committed to my staff that I would stay and was asking them to stay. For those that did not want to continue, I asked for advanced notice and in return, I would help them find a new opportunity.

Although, the situation was challenging and tested all of us in many ways, we collectively had a true desire to help our employees by providing information, guidance and some occasional inspiration. The result was a successful mission fly out of an impactful and inspirational national program.