Firms urged to lessen turmoil of layoffs

SOFTENING THE BLOW

December 17, 1990|By Ross Hetrick | Ross Hetrick,Evening Sun Staff

Reduction in force, skill mix adjustment, termination, layoff. While there are many ways of saying it, it all means one thing: no job.

Downsizing, another way to describe layoffs, is one of the most stressful situations in corporate life. While the emotional turmoil and financial difficulties that follow layoffs can not be erased, they can be lessened if companies take the time to plan.

"It's really important to do downsizing right," said Frank S. Piff, the head of Frank S. Piff & Associates, a business consulting group. "How do you want to be seen by the people who are leaving and by those who are staying?" he said.

Piff made his remarks on Thursday to a seminar intended to help companies handle downsizing more smoothly. The seminar was sponsored by Legg Mason Corp. a Baltimore stock brokerage firm.

One key to a successful layoff is to offer a generous package that includes ample severance and help in finding another job.

"It's better to err on the side of being too generous than too cheap because you may end up paying more in the long run," Piff told the seminar.

Help finding a new job, which was essentially non-existent before the 1980s, is known as "outplacement."

Besides improving the company's image in the eyes of the people who stay, outplacement has also prevented "millions of dollars" in lawsuits by terminated employees, Piff said.

He said terminated workers sometimes threaten to sue as soon as they get the bad news. But Piff said an outplacement counselor, who should be available at the time of the notice, will tell the worker the following: "You can sue, but that is a full-time job. Or you can put your efforts into finding a job, which is also a full-time job."

As more employers provide outplacement service to the workers, various firms have grown to meet this need.

One of these firms is Right Associates, a Philadelphia-based company founded in 1981 that has since grown to have 72 offices and a work force of 450. Fourteen of those offices are in foreign countries.

"This has been a good year for us," said Martin G. Pilachowski, senior vice president and managing principal in the firm's Baltimore office. Revenues for the entire company should be for the year should be more than $50 million, he estimated.

What Right Associates does is to teach people how to find jobs. "Quite frankly, outplacement works," Pilachowski said.

The service provided by Right Associates, which is always paid for by companies and not individuals, varies from very personalized attention to group seminars.

The more expensive service, which is usually provided to terminated executives, provides one-on-one career counseling, financial consulting and office and secretarial support. To provide this support, Right Associates has a suite of offices at the disposal of its job seekers.

The program is designed to help the job seekers reach their goals. About 70 percent of the the people Right Associates counsels want to re-enter the job market and another 10 to 15 percent want to start their own businesses. The remaining 15 percent are looking into consulting in their field or pursuing special projects, like teaching, Pilachowski said.

But all of the clients in the individualized programs had one thing in common -- they all found jobs, Last year the Baltimore office handled about 100 to 110 such cases and the company was able to help them find jobs within an average of 4 1/2 months, Pilachowski said.

Besides the individual programs, Right Associates also offers group seminars, which are usually given to lower level workers. The firm normally handles about 30 to 35 of these groups each year, with about 10 to 15 participants in each group. Pilachowski said it is more difficult to track the success of these people.

Right Associates charges 15 percent of the employee's normal cash compensation for their top individual program. Pilachowski declined to give the cost for the group sessions, but said the going rate for a standard counseling day is about $1,500.

Bethlehem Steel Corp., which pared its work force dramatically during the 1980s, used outplacement services extensively, according to Benjamin C. Boylston, vice president for human resources for Bethlehem.

Hit by foreign competition and the recession of the early 1980s, ++ Bethlehem's national work force shrank from 100,000 in 1977 to 29,500 now. At its Sparrows Point steel mill in Baltimore County, employment dropped from 18,000 in 1977 to 7,000 now.

To deal with these terminations, the company for the first time in its history hired outplacement firms, which put the workers through a number of workshops. After these sessions, the company provided office space and secretarial support to help the salaried workers find new jobs. If space was not available at a Bethlehem plant, office space was rented, Boylston said.

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