Early notice, honesty make downsizing more palatable

Internal program can keep productivity up

It was a lesson in downsizing gone wrong: Without prior warning to the employees, the Virginia hospital brought in its own "Chainsaw Al," and quickly announced the planned layoff of 15 employees. One of the laid off employees, bitter and resentful, contacted the press and claimed the hospital was sacrificing quality of patient care for profits.

That’s exactly what the media reported the next day. "The media reports were so negative that the hospital administration needed to have a representative talk directly to the press," recalls Bill Ballas, a partner in Richmond, VA-based MOD Public Relations. "They had someone from the outplacement firm comment, which made things doubly bad."

As downsizing continues to be a major force in the health care industry, hospitals need to take special precautions to stem negative publicity or guard against demoralizing employees. Implementing an employees’ communication plan, bringing your workers into the process early, and being open and honest with them are positive mechanisms that will pay great benefits, experts say.

"If there’s a new manager brought in who has built his career on his reputation as a ‘change agent,’ that reputation precedes them, and once they are brought in, word quickly spreads among employees," Ballas warns. "If you communicate with the employees before the change agent comes in, you can address their fears and concerns, and enlist their help in ‘righting the ship.’"

Today, MOD has developed and markets an internal public relations campaign, "Beyond 2000," designed to help employers maintain productivity during downsizing.

"Employees should be told a few months in advance of the actual reorganization," Ballas insists. This early notice helps establish a relationship of trust that will serve both the employer and employee well in the future, he says.

Learning from the past

Ballas clearly knows whereof he speaks. In the example of the Virginia hospital cited above, the layoffs were announced on a Tuesday. "On Wednesday morning at 6:30 a.m. I heard about it on the radio," he recalls. "It hurt the reputation of the organization, and made it more difficult to recruit employees in the future." The hospital clearly paid the penalty for not having an employees’ communication plan in place.

Another client had spent $250,000 to recruit a certain employee. She had been on board three weeks when layoffs were announced, and she left because she felt she would be next. "She didn’t believe them when they said her job was secure," says Ballas.

As an in-house marketing professional in the early 1990s, Ballas learned firsthand many of the dos and don’ts of downsizing communication. For example, he was director of marketing at Bon Secours/St. Mary’s Health System in Richmond in 1993 when his department was asked to review internal publications, without being told the reason for the review. "Even though the reason [for the study] was never explicitly shared, we sniffed [the reorganization] out," recalls Ballas. "We found out that employees liked the publications, but they were concerned for their jobs." After the official announcement in April 1993, Ballas said there was a noticeable drop in employee productivity in non-patient-care areas.

In a more recent experience, at the Health Sciences Center at the University of Virginia in Charlottesville, Ballas saw the benefits of a more open administration.

Once a planned reorganization — which did not necessarily include layoffs — was announced in February 1994, the value improvement effort was kicked off with meetings led by the CEO.

"The main message conveyed was, ‘We want you to ask questions,’" explains Maureen Wellen, director of marketing. "Of course, not everyone is brave in a big room, so the employees were told they could send e-mail or voice mail, and they would receive a reply."

The meetings were held around the clock to accommodate different shifts and were followed by progress reports in the center’s internal newsletter, along with drop-in sessions over a period of two weeks where employees could talk to a hospital executive one on one.

"As an employee, I would say they marketed to me very effectively," recalls Wellen. "I have a very vivid recollection of the CEO talking to me on the phone." (She was stranded at home due to car trouble.)

"Putting a human face on the administration was key," notes Ballas, who at the time was director of marketing and communications at the UVA Neurological Institute. "Responding candidly is absolutely essential, and one of the beautiful things was they had representatives available to talk to people round the clock. The subsequent communications in the in-house publications to create consistent awareness of what was happening was also critical."

The one thing Ballas would do differently today, he notes, would be to bring the employees into the process much earlier. "The intent was clearly to get buy-in after the fact," admits Wellen, who quickly adds that there were no disgruntled employees alerting the media. "There was very little leakage [to the press]," she says.

But it is essential, Ballas insists, to establish a "baseline" understanding of where employees are in order to ascertain their current fears and concerns. He does this through a series of focus groups, comprising employees "from all walks of life — as diverse a group as possible." First, assess how they would feel about losing their job, the mission of their organization, what’s happening in their industry, how it might affect the company, and how they would like the organization to treat them if a reorganization were to occur. Basically, Ballas says, management should communicate the message that, yes, the industry is changing, but the employees are integral to the organization’s mission; their efforts to re-engineer and their improvement in total quality management are valued by the company.

"Share the results of employee surveys with them," he advises. "You need to focus on the good news. It will be more believable to the employees if it comes from a survey, because they actually said it."

(A complete outline of a "Beyond 2000" communication plan is inserted in this issue.)

[Editor’s note: For more information on "Beyond 2000," contact Bill Ballas at: MOD Public Relations, 300 Turner Road, Suite E, Richmond, VA 23225. Telephone: (804) 674-1626.]