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The Art of Layoffs in Construction

CFO Magazine ran a great short article called You're Fired! But Why? which points out a couple things that really apply to contractors.

The first major point is that only 74% of employees believe they were clearly informed of the reasons for their dismissal. This is a general survey - I bet the number is much, much lower for craft people in construction.

Our typical explanation is that people are "laid-off due to lack of work." I know I've done my share of these "lay-offs" and the truth is that only a few of them were truly heart-wrenching and fell into the category of: Market sucks, I feel like I failed to do my job and therefore you have to lose your job.

The rest of them fell into the category of: WOW - I'm glad that crunch is over and I can finally get rid of you because you have all the skills of a bad second-year apprentice!

In 1999 when out here in CA were were in the peak of the dot-com boom I recognized that part of the incredible labor shortage we were facing had to do with this practice. Looking around the crew I saw many people who had been through dozens of employers and always just had to "move-on due to lack of work."

No one had ever sat down and explained to them the basic concept of:

The weakest players usually get laid-off first.

This is a fact in construction and in life. How much better-off would the industry be if every time we laid someone off we took the time to explain to them where they were strong and where they were weak? What if we sent them on their way with a recomendation for training to help them improve that weak spot?

Schools and and the entitlement mentality that many people grow up with do not lead to deep self-reflection and with so many employeers basically lying to people about why they are being laid-off it actually keeps the industry from improving.

In January of 1999 I decided to change this for myself. On one job I had about 20 layoff checks to hand out and instead of doing it quickly at the end of the week like I had done in the past I sat down and spent several hours making a list for each person so they knew exactly where we felt they were weak and where they were strong. Working with the job foreman we had conversations with each and everyone person.

It was emotionally very hard for us to do - and it was emotional for the employees. There were tears - for many you could tell it was the first time they had ever been confronted on their performance.

What if everyone in the industry had started doing that 7 years ago? Do you think our workforce would be a little better developed by now?

This brings us to the second great point of the article - the concern that if this is done then past employees will come back on the company with wrongful terminations lawsuits.

If your HR Manager is giving you this advice simply fire them and find a real leader for this position.

As the article points out the opposite is true.

First of all, people sue people, not companies.

Secondly, if employees are confronted up front about both their good and bad performance and given a method to improve then there will likely be negative emotions at the moment but the next morning they will see that you really did care about them and their attitude will improve.

When employees are simply laid-off the intial emotional reaction may not be that bad but the next morning they will start to think about it. Why did YOU let them go? YOU must have been playing favorites. YOU must have had it out for them. As their job search progresses they will continue to boil inside - YOU did this to them.

That is where most of the lawsuits come from - not from the employee that you really helped out.


Posted by David on November 27, 2006 05:00 AM|Permalink

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