Let layoffs not affect remaining staff

I often hear senior leaders in several industries, not only hospitality, make statements about their workforce as their "greatest asset" or as "human capital". This clearly speaks to the correlation between fiscal performance and the manpower that run the day-to-day operations of a business, but unfortunately I have seen many examples over the years of actions that fly in the face of this stated belief.

The challenge for all is how one manages that "asset" and "capital", if indeed that is how one wishes to perceive one's workforce, in order to produce the best return. In the hotel business, where labour and related benefits are the most significant, it is often there that I have seen the most reductions being made. In the current economic climate, it is the labour force that has seen significant reductions, as occupancy levels and diners in restaurants have dropped dramatically.

The decision to make a reduction in "assets" is the most difficult and the most impacting on your business. It raises serious questions such as – does the reduction, for example, of the number of guest services or bell staff, negatively impact the guest experience? Does one trim administration areas such as sales and marketing or finance and possibly jeopardise future sales or fiscal controls? How does one make these types of changes without a demoralising effect on the remaining workforce? Most importantly, how does one handle those who are losing their employment and livelihood in the most compassionate and caring manner. These decisions are not generally thought of as "asset management", yet the long-term effects of poorly made decisions could be more significant than any other cost reductions made.

So how are these decisions to be made? First and foremost, it is critical to remove emotion from the process, though strong leaders will inevitably do their best to protect their team members. (Should they not have that desire, I would suggest they be the first to be considered dispensable.) Secondly, there has to be a process by which the contribution of each team member can be evaluated without favouritism or dominant personalities prevailing. The best place to begin is with the clinical manning guide, which can be reconfigured to reflect the needs of the anticipated business levels. Once this process is completed, it then becomes a mathematical process to identify which positions – and I mean positions, not people at this stage – that will need to be let go.

The greatest challenge comes with putting names to positions, and this is where the culture and the values of the hotel and company must come to the forefront. How people are identified cannot be the responsibility of one or even two people. There must be several people involved in the process, including as a minimum, General Managers, Human Resources Directors, and key senior managers, all of whom must be held accountable to ensure consideration is given to the most relevant factors including performance, length of service, family status etc. Laying off a star performer who drives revenues through their efforts is tantamount to shooting oneself in the foot, but similarly laying off a solid performer who is the sole bread winner for their family requires a coldness of heart that should not be easily found in the "hospitality" industry.

Remember to treat people the way you wish to be treated yourself. People understand the harsh cruelties of difficult economic times, but they do not understand dishonesty or lack of compassion when it comes to the manner in which they are dealt with.

When economic downturns end, it has been shown repeatedly that businesses with the greatest commitment to success from its workforce reap the greatest returns.


- The author is Regional Vice-President, UAE for Fairmont Hotels & Resorts and General Manager, Fairmont Dubai

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