Facing up to layoffs Essay

Most of us, when asked to rank our job duties in order of preference,would probably put firing employees at or near the bottom of the list.Telling someone that he or she is out of a job is one of the hardestthings a manager must do.

It’s particularly sobering when weconsider how it affects not only the employee but also a host of familymembers, friends, and creditors. When termination culminates a long struggle between poorperformance and progressive discipline, we can take solace in havinggiven the employee every opportunity to hold onto the job. This used tobe the standard pattern of laboratory terminations–until recently.

Today, many helath care professionals confront an unpleasantmanagement dilemma once rare in our field: layoffs. The nationwidedecline in patient census, coupled with an increased awareness of theneed for cost reduction, has prompted many hospitals to reducepersonnel, their biggest operating expense. This sudden need for substantial staff cuts caught manyinstitutions off guard. Some hospitals do not even have a writtenlayoff policy. To steer clear of any suggestion of discrimination, mostinstitutions follow the “last hired, first fired” policy indetermining who should go. Unfortunately, this often removes highlyproductive, highly motivated (and lower paid) members of the work group. Some of us may be tempted to take the opposite tack, and use staffcutbacks as a convenient chance to rid the laboratory of costly andperhaps less productive senior personnel.

At best, this tactic createssevere morale and public relations problems; at worst, it can result ina lawsuit. Intelligent staff-cutting policies are a sad necessity until thehospital cost crunch is reversed–and that appears unlikely in the nearfuture. Good communication is critical before, during, and after thetraumatic events. Layoffs should never come as a surprise.

Long beforeactual cuts are made, management should hold meetings to inform thestaff of the need to reduce operating expenses and increaseproductivity. If layoffs become inevitable, we must promptly explainwho will be terminated, when, and why. It’s the only way to keepone step ahead of the inevitable rumor mill. Notify employees of their job termination in private and as soon aspossible. Give them complete details on severance pay, benefitcoverage, and related matters. Going a step further, hospitals would dowell to emulate other businesses by offering placement services thathelp overcome the emotional and financial strain of a layoff. Of course, the best way to deal with layoffs is to avoid them.

There are few better uses for our creative talents than in averting needless personnel cuts. Now that length of patient stay is decliningin many hospitals, we need an active data base to convinceadministration that we are still operating efficiently. Since most labtests are performed during the first half of a patient’s stay, weshould be able to demonstrate the limited impact of shorter stays ontest volume. Bringing in more testing is another way to avoid layoffs. Newpayment regulations make it advantageous for hospitals to perform moreoutpatient and preadmission testing. Instead of laying offtechnologists, perhaps we can put them to work as marketingrepresentatives, attracting new business to the laboratory.

It may bepossible to prove that unemployment payments and other costs outweigh the financial benefits of short-term staff reductions. When staff reductions are the only answer, we must work to softenthe blow. Has the laboratory considered an incentive programencouraging senior personnel to choose early retirement? Havevolunteers been sought to take a cut in paid hours by leaving work earlyduring slack times? Given the high number of second incomes in ourprofession, many employees might be receptive to flexible workdayoptions that allow them to spend more time at home.

Perhaps the burden of cost reduction can be shared by the entirework force, instead of a few individuals. A simple across-the-boarddecrease in hours, or extra unpaid “vacation” days, cansubstantially lower personnel costs without eliminating any positions. Remember, however, that across-the-board cuts risk infuriating thewhole work group.

Management must have a thorough understanding ofstaff feelings before implementing such a program. In a moreconservative approach, the laboratory might hold positions openindefinitely when they become vacant. This is attrition. It works onlyif the lab’s turnover rate is rather high and the need to lowerlabor costs is not acute. If you haven’t faced the threat of layoffs yet–or if youhave, and hope not to again–start planning now.

Your main objectiveshould be to enlist the staff in maximizing efficiency. Acknowledgethat funds are very tight, and ask for suggestions and support.It’s time we closed ranks in the laboratory, instead of justthinning them.


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