Does a company have a responsibility to be compassionate?

In this critical time in our country’s history, many companies are finding themselves having to make tough choices if they are going to survive this economy.  Most times the choices involve reducing costs.  This is a code word for laying off employees.  It is amazing how many companies seemingly accomplish this task without a lot of compassion.  With the stroke of a pen thousands of people’s lives are changed forever.  Some never recover from the loss.  The result can be the loss of a home, car, or deferred dreams.

Don’t get me wrong, I know that sometimes it is necessary to reduce staff and cut back on other expenses in order to ensure the survival of a company.  My question is why do so many companies make this decision and carry it out with such a lack of compassion?  I have a friend whose wife worked for a Bay Area company that called all of their field staff into the office.  As each of them arrived at the corporate office they were greeted by their supervisor who took the keys to their company vehicle handed them their last check and gave them cash for the waiting taxi that took them home.  How cold is that?

There has to be a better way.  When I was laid off from my company, not only did they give me warning, but they also explained the reasons why the decision was made.  Obviously anytime you are laid off it doesn't feel good, but when a company is cognizant of the effect that the decision will have on the employee and take steps to mitigate the shock, it goes a long way to maintaining the person’s dignity.

As a leader I think it is critical to stay in front of your business and to take steps to minimize the need for layoffs.  What do I mean?  With the exception of external forces beyond the company’s   control, there are steps the company can take to mitigate the necessity for layoffs.   Proper business forecasting, staying lean, and understanding your market can help. In addition, growth should be very strategic and personnel hired only when capacity dictates.  I hear of so many companies who experience explosive growth and hire a lot of personnel.  In short order someone gets the idea of improving efficiency which results in the loss of jobs.  Efficiency is required for a business to deliver consistent services and products to the customer, but more thought should be given beforehand to implementing streamlined processes and hiring based on anticipated need.

Leaders have a responsibility not only to their shareholders and boards, but to the people they lead.  I think you can take care of both if leaders get out of short-term thinking and look to the long-term benefits of all those they lead.  Building a compassionate and caring company culture is achievable if the right person is at the helm.