Why Firing People is Leading to a New World Order

By Gav Ravichandra, Co-founder and Managing Partner, Kompass Consultancy

Over the next ten years, the word “permanent” is likely to gradually disappear from job advertisements and manpower planning strategies. In an increasingly virtual world, it is difficult to justify hiring permanent staff when you can outsource and contract for specific roles with a simple Google search.

“You’re fired!”

These are two words that, as an employee, we never want to hear.

Hearing these words, regardless of the motivation behind them, significantly distresses us– as evidenced from any episode of The Apprentice. Maslow acknowledged the importance of economic safety in his Hierarchy of Needs when he designated safety as second only to food, water, and air.

However, economic safety for millions of people around the world is threatened by the COVID-19 pandemic. As the virus continues to devastate lives and businesses, many leadership teams have been forced to make the difficult decision to lay-off and furlough their teams.

Unfortunately for humans, the loss of a job has long-lasting effects. The psychology of job loss is consistent with what we see in most situations which concern loss and grief.  The Kubler-Ross DABDA (Denial, Anger, Bargaining, Depression and Acceptance) model -particularly pertinent in these situations– sees people vacillate between different stages, or even to experience all of them in a single day.

These feelings – which are already devastating on their own– are significantly amplified in an already high-stress, high-pressure environment. Research by George Bonanno (2010) from Columbia University highlights that “people are more stressed out when they fear losing their jobs, than they are when they actually get laid off.  When massive job layoffs come closer to home and are observed in their communities, people are more likely to feel they are next, and their well-being drops significantly as a result.”

Recent statistics from governments around the world highlight that many employers will be separating from their employees in the coming months. In April, Australia’s Department of Treasury indicated that its unemployment rate would double from 5.1% to 10%. According to Larry Elliott, a journalist for The Guardian: “It matters a lot that the official US unemployment rate rose by more than 10 percentage points to 14.7% in a single month, that the real level of joblessness is actually around 25%, and is likely to reach 30% before it peaks.” The recent COVID-19 pandemic merely exacerbated an already failing system.

As we turn our attention to HR and executive teams who will be spearheading these processes, we ask: what opportunities does this present for employers? How can employers retrench employees while minimizing the damage to company morale and productivity? Over the last 20 years of supporting the separation process, I believe the humanistic considerations below are critical:

  1. As an employer, am I clear about why this separation needs to take place and how it links back to the organization’s vision, mission, and values?
  2. Are there ways in which the employee could be utilized and engaged within other areas of the organization? Are we happy to be losing their institutional knowledge?
  3. What are the employee’s circumstances that we need to be aware of as their employer, i.e. debts, family status, responsibilities, etc.?
  4. Can we prepare the employee for separation through providing them with enough time to contemplate the change being considered? Do we need them to leave today, or can there be a phased departure?
  5. Do we support the employee through career transition or outplacement to help them through the separation process, and to find a new role or venture, and to deal with their emotional and financial needs?
  6. What are we doing to manage the “survivor syndrome” of those employees left behind once other employee(s) have left the company?

As an employee, the veil of job security within a “permanent” role is becoming more and more ephemeral. Over the next ten years, the word “permanent” is likely to gradually disappear from job advertisements and manpower planning strategies. In an increasingly virtual world, it is difficult to justify hiring permanent staff when you can outsource and contract for specific roles with a simple Google search.

This shift is likely to push employment into a more “fractional” state of existence; “employees” becoming their own bosses and undertaking multiple contracts for different organizations at any given time will be the norm (McKinsey Global Institute, 2016). Ultimately, employment will be about outputs, and not inputs. Employment will be more concerned with what you can deliver, rather than the number of hours you put in.

This shift is already present in industries with big ideas and small budgets. Projects often experience either stalls, delays, or a lack of capability that cannot be remedied through conventional hiring practices. This leads to an “adapt or die” business environment- especially in times of great uncertainty. The previous three Industrial Revolutions showed us that those who were able to adapt more quickly and with more certainty experienced more sustained success. This is an opportunity for employees to experience more freedom in how they operate, what they provide as a service or product, and for whom they work.

My prediction is that we will look back at the year 2020 as the start of a global transition to organizations that are focused on outputs and deliverables instead of how many hours we’ve spent “clocked in.” The Fourth Industrial Revolution –living, working, collaborating, and innovating through technology– is here. It’s time to embrace change.

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