Pink slip. A term that has finally arrived in India and is garnering immense amount of attention, thanks to the media thrashing the new-age companies. This is a recent phenomenon, though it has been industry-specific through the years--dot com had 2000, retail had 2007-08 while media and IT always straddled the middle. While some were genuine, many were due to optimism and the ‘ramp up’ by easily available funds, as well as the hype in those industries.
I have been a part of a couple of these industries; and have written otherwise about the current e-commerce, disruptive new-age businesses that have been unable to handle growth--and people, mainly--among other things. Whilst in the past one year there have been many closures well-documented and hyped by the media, some founders and CEOs have managed to put their points across; but when the media and the ill-informed bay for blood, there is nothing really to debate.
IT, manufacturing, media and other industries have become masters at handling the fallout, and many a times, very few people are even aware of it outside the industry. So, why such a hullabaloo over these new-age industries handing out the pink slip?
There are many reasons to this, and many more learned people can debate and write books about it. However, in simple terms:
The ramp up based on 10x growth projected during funding does not take into account that technology should help reduce manpower. The bleed becomes more than expected, and there is no plan as such on employee engagement and alignment--a couple of bean bags and foosball tables with free food doesn’t work for long. Given the age and exposure, there is limited people-knowledge, which is definitely a large hindrance. Last but not the least, “In India, employees are capitalists when it comes to growth and socialists when it comes to layoffs.”
With the advent of the so-called millennials, transparency and other demands grow, including first-world-convenience comparison; this nightmare will keep growing. Loyalty works both ways, and if an employer pays 2-3x, you have to accept the bad.
Having said this, there is a lesson which the founders and co-founders alike need to imbibe and practice. All of us who have worked for quite a while have handed out pink slips for varying reasons. Over the years, I have done it quite a lot personally; believe me, it is never an easy task to do this, but at times it has to be done.
Over time, I have realised that it should be done with grace. I have also personally drawn up what I refer to as appropriate etiquette for communicating bad news/handing out pink slips.
Bad news in face-to-face meetings only, with human touch
I believe in never giving bad news by telephone, email or via someone else. It is your employees’ right to hear it from you straight and without embellishments. Never use a third person or make excuses such as ‘Management has decided’, ‘Boss has decided’, etc. It just demeans the whole communication and relationship.
Privacy
This is another important criterion when giving bad news. Yes, even in this day and age of open offices. If need be, take him/her out for coffee or wait till the office is empty.
Spend time
Nothing is cut and dried, such that you announce, get up and walk away. Spend some time, share good thoughts.
Extend support
Unless it is ‘termination’ for a serious offense, always extend support in terms of providing references, helping connect with people, etc. It really does not cost anything.
Keep in touch
This is one thing I believe in strongly. There is no need to be apologetic about the whole thing and avoid facing or meeting them, or even avoiding their calls. They are your good will ambassadors, and there is every chance that a time may come when they would be able to assist.