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Transition Policies are Critical Ingredients of a Corporation’s Human Capital Strategy

A man leaving an office with his belongings packed in a box - transition policies

Employee transition is one of the 3 legs of human capital strategy. It is foundational to the trust relationship that needs to exist between the employee and employer to effect true human capital strategic alignment. So, when it becomes necessary to change the relationship, the rest of the organization is going to be paying attention to how the change is managed, and why having transition policies is critical. Are all options in lieu of termination explored?

In the case of individuals, that may mean retraining and/or reassignment, and for groups, reduced hours, pay reductions and the like. But if termination is the option, then people are going to be laser-focused on the process. How was notification given? How was the exit of the affected person(s) choreographed? Was it dignified and respectful? Is the severance package appropriate to level and length of service? How much and what kind of assistance is being offered to help the departing employee(s) become established in new opportunities?

Respectful Employment Transitions Protect Employee Dignity

Transition policies with a process that is built upon respect and is implemented so as to protect the dignity of the affected individual(s) is of paramount importance. People know things change and that sometimes people and companies must part ways, but they will not accept their co-workers being humiliated or hurt. Employees know that the way a co-worker is treated is probably the way they would be treated too, so in their minds it’s, “As goes he/she, so go I.” What you say is important. What you do really means something.

While fiscal reality is a legitimate factor in determining what can be done for exiting employees, direct dollar cost must not be the primary consideration when determining what should be done or how transitional policies are set. A poorly planned or mishandled workforce reduction—whether one person or hundreds—will have devastating and lasting effects on the organization; litigation costs will escalate, productivity will decrease and unwanted turnover (most often with people taking your secrets to your competitors) will increase. It will be increasingly difficult to attract top talent and your brand will be badly damaged. Trust will be destroyed.

Lower Total Costs of Terminations with Outplacement Support and Transition Policies

Career transition or “outplacement” services reduce the risks and costs of employee terminations. Exposure to wrongful termination litigation is mitigated, productivity losses that commonly accompany workforce reductions are minimized and the costly unwanted turnover that is often a by-product of staff reductions can be virtually eliminated, especially if transition policies are not already in place. When outplacement and career transition services are core elements of your human capital strategy, trust will not be compromised and your brand will be shielded. And, just for the record, it is the right thing to do, morally and strategically.