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A Clean Way to Clean House: The Role of PR in Layoffs

Posted At: October 21, 2009 1:23 PM
by Meg Watson

During the past year, headlines have been filled with news of layoffs. According to the Layoff Tracker, more than 600,000 Americans have been laid off since Nov. 1, 2008. The economic recession forced companies such as General Motors, Boeing and Eli Lilly & Co. to drastically reduce their workforces, leaving thousands of Americans without jobs.

Among the companies forced to downsize was Hyatt Hotels. Hyatt recently found itself in the midst of a PR nightmare when it outsourced the jobs of 98 housekeepers from three of its Boston area hotels. The housekeepers, who made $15 an hour, were asked to train some new employees who would fill in for them when they took vacation. Then, managers informed the housekeepers that they were being laid off and replaced by the workers they trained. The new workers were employees of a staffing agency, and made $8 an hour.

This situation sparked public criticism from many in the region. A hotel workers union, Local 26 of Unite Here, took up the cause of the fired housekeepers. The Boston Taxi Drivers Association also demonstrated their support for the fired workers by threatening to refuse customers traveling to and from Hyatt hotels in Boston. The PR firestorm climaxed when Massachusetts Gov. Deval Patrick threatened a government boycott of Hyatt Hotels unless the housekeepers were rehired.

How could Hyatt have better handled the necessary workforce reductions and prevented the damage to its reputation? Maureen Gleason is the vice president of operations at American Behavioral in Birmingham, Ala. She has extensive experience with downsizing events and offered her opinion on Hyatt‘s critical mistakes.

Gleason suggested that Hyatt should have first considered all alternative options to cut expenses. She also said Hyatt should have had outplacement and other services in place before the layoffs occurred so employees would not have felt so abandoned. Gleason said giving employees assistance in the first place would have prevented the bad publicity that plagued the company after news of the layoffs became public.

“When they finally realized they had a public relations nightmare on their hands, the damage was already done,” Gleason said. “Their additional efforts to assist the laid off workers were seen as weak attempts to put a happy face on a poorly handled event.”

In this economy where stories like Hyatt’s are a regular occurrence, PR professionals need to understand how to handle the delicate issue of company layoffs. Gleason stressed the importance of planning and said PR professionals must consider all aspects of the workforce reduction.

“Human Resources personnel, public relations staff, management and the Employee Assistance Program representative should collaborate on a plan to implement every step of the layoff to ensure that it is communicated in the most effective and dignified way possible,” Gleason said.

Robby Johnson, APR, is the marketing manager at Tuscaloosa-based The Westervelt Company and has experience communicating workforce reduction with several employers. Johnson said PR professionals should focus on their organization’s internal public communicating authentically during a period of layoffs. The loss of the workforce will doubtless have an effect on the employees who remain in the organization. Johnson said it is important to acknowledge that sense of loss and help rebuild morale.

“It would not be appropriate to have a lavish event to build morale, but there are a plethora of creative outlets which cost nothing yet contribute significantly to collaboration and rebuilding shared purpose and performance equity,” Johnson said.

Johnson also emphasized the need for transparency in communicating layoffs. He said PR practitioners should deliver measurable messages by referencing the finite reason for workforce reductions, such as a budget analysis or market-changing condition. Johnson also said PR practitioners should equip managers to deliver the news to affected employees.

“Working with HR to develop a FAQ or speaking points is where an ounce of prevention will exceed a pound of cure,” Johnson said. “Managers may not always have a lot of time to prepare for this sort of conversation, so equipping them will do much to make it easier for all parties by maintaining consistency of messaging.”

If Hyatt Hotels had taken steps to make downsizing easier for all parties, perhaps it would not have suffered such reputation damage. Had Hyatt’s PR staff been aware of the managers’ plans to outsource labor, they could have taken steps to ensure the workforce reductions were handled in a more ethical manner. Johnson advised PR practitioners to avoid Hyatt’s mistakes by seeking ethics input if faced with an ethical dilemma.

“A practitioner challenged with a scenario outside what they feel is an honest organizational position should seek ethics input from a trusted source, like PRSA’sCode of Ethics,” Johnson said.

As practitioners, our role is to ensure that unforeseen circumstances — such as a downfall in economy — do not destroy critical relationships with internal and external publics. Though little training is given to PR students for handling situations such as layoffs, PR practitioners should have a strategy in place in case their organizations are one day forced to downsize.

Photo by Niki Gautier

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