British Airways Bumbles HKEXIT
The recent news about British Airways unceremoniously sacking its Hong Kong based flight crew has led to outcries in Asia’s World City. This is yet another example of a major corporation not quite getting it right when it comes to terminating employees. This case is particularly shocking since BA is a UK headquartered company. In the UK, employers must follow strict labour laws, provide employees with ample notice, redeployment support and generous severance packages. Although the labour law in Hong Kong differs considerably, a company should consider not only their legal obligations but also their own culture when determining how to approach a mass redundancy, restructuring or office closure. Just because Hong Kong labour law makes it easy to dismiss employees, that doesn’t mean that it is the right thing to do. I am a firm believer that employees should be treated the same way on their way out of a company as they were treated on the way in. Why don’t employers take the same care that they do designing induction and on-boarding programs as they do when initiating a mass lay-off? There is a better way.
I am a firm believer that employees should be treated the same way on their way out of a company as they were treated on the way in.
As a caveat, a lot of the details about what happened at British Airways HK last week happened behind closed doors. So I can only comment on what I have read and offer advice based on my past experience. And British Airways is far from the only company that has struggled with how to terminate employees. As an example, Standard Chartered made swift changes to their Equities business a few years back, which left their employees locked out of their offices, shocked and dismayed.
Below are a few pointers for British Airways or companies like them who find themselves in the unfortunate position of having to lay-off large numbers of employees. Hopefully, taking these steps can show your employees you’ve tried to retrench them with care and compassion and help your message land more effectively.
Should you rip off the band-aid and terminate employees without any warning, or should you follow a slow drip approach, where rumours about lay-offs circulate for months, distracting employees and damaging morale? Neither option is perfect and both have pros and cons. If you suddenly terminate employees without warning, they will be shocked and it will take them longer to accept the outcome. On the other hand, if lay-offs are dragged out, employees get distracted from their work and become disengaged and fearful about their future with the company. This has a terrible impact on morale. However, employees may ultimately be more accepting of the outcome because they will have had more time to prepare – perhaps they will have already updated their CV or spoken to headhunters. For this reason, I think a combination of the band-aid approach and the slow-drip approach should be used. In practice, this means that as soon as rumours begin to circulate about a potential lay-off or office closure, a company should act as swiftly as possible to execute the lay-offs. This is the only fair option to your employees.
Who communicates counts
Hierarchy and seniority are important in Hong Kong. In the same way that a senior manager would deliver an important message about the company quarterly results, employees expect that someone senior will deliver the message about their termination. It shows that the termination itself is important and that the company cares enough to send a senior person. On the other hand, if the message is delivered solely by the HR person, employees may feel slighted and unappreciated. From the get-go, they will be much less likely to accept the message.
Provide a detailed exit package
Local newspapers reported that the BA HK flight crew were given letters stating that they would get an ex-gratia payment as part of their exit package, yet they were not told the amount of the payment or the mechanism for calculating it. I would question how BA could expect their impacted employees to make an informed decision if they aren’t given the full details of the package. Of course, many firms will not disclose the mechanism for calculating a redundancy package, but BA should at least disclose to their employees the amount of the ex-gratia payment. News reports in recent days state that BA has gone back to the drawing board and will now provide the employees with more details on the payment, but this snafu could have easily been avoided by being more transparent up-front.
News reports say that the BA employees were given notice of their termination on a Wednesday and asked to sign their agreements by Saturday in order to receive their ex-gratia payment. Less than one week is not a sufficient amount of time for your impacted employees to consider the package. Depending on the complexity of the package, the employee’s contractual notice period and the time of year, an employee should be given a bare minimum of one week to consider a package and generally two weeks or more would be fair. When BA terminated staff in its Singapore office, media reports indicate they were given six months notice. Why wasn’t a similar approach followed in Hong Kong?
Weigh the risks
Consider whether or not you really need to march your employees out the door on the same day they are terminated. Can you provide them with more notice or give them an option to work for some portion of their notice to allow them more time to transition? Risk is a major consideration when making this decision. In my previous role, our Traders traded millions of dollars a day and worked largely autonomously. If they purposefully input some bad trades because they were upset with the company about their termination, we could lose millions of dollars within minutes. This is a clear risk and a logical reason as to why these types of employees would not be asked to work after having been terminated. In BA’s case, having any impacted cabin crew aboard a flight could be a risk to their operations. However, perhaps the crew could have been temporarily redeployed into lower-risk ground-employees or office roles for a period of time.
Formal outplacement services are expensive and there is no obligation for employers to provide them in Hong Kong. However, even small overtures can demonstrate support and go a long way toward landing a difficult termination message. For example, members of your recruitment team could be mobilized to offer redeployment services. They could help the departing employees polish up their CV’s, conduct mock interviews, update their LinkedIn profiles or put them forward for other roles internally. Another option is to coordinate with your industry peers to see if they have any jobs available that your impacted employees might be suitable for. When I worked at a bank and we went through a similar exercise, our recruitment team called around to their counterparts at other banks to see what jobs were on offer, got an updated list of roles and made sure it was given to our impacted employees. You can also pull together a list of industry-specific recruitment agencies and give it to your impacted employees so they know who can help them once they start looking for a new role. These are three simple, low-cost ways to support your impacted employees and make their transition out of your company smoother.
Have a plan for the backlash (and there will be backlash)
Even if you’ve taken all of the above steps and really thought through every possible consequence and eventuality, something will go wrong. Be ready for the backlash. Coordinate closely with your Communications team (and if you don’t have one, develop your own communications plan) and be able to clearly convey the concrete steps you’ve taken to make the transition as smooth as possible for your impacted employees. From more recent news reports, I see that BA has already taken steps in this direction and is offering to extend its deadline and provide more details to employees on the calculation of the ex-gratia payment.
Finally, when sensitive, highly complex employee issues like this one arise, management teams should partner closely with their HR leader. In this case, I can only assume that the well-thought out guidance and advice of the BA HR team was ignored by senior management. Remember that your HR leaders are there for a reason – use them. Listen to their counsel when issues fraught with potential reputational damage arise. They value the business and the employees and are skilled at balancing both priorities to get to a mutually agreeable outcome that demonstrates both care and compassion.
Facing a possible large scale redundancy, restructuring or office closure within your company? Please contact RC HR Consulting to see how we can help.
Renee Conklin is an HR Leader who writes about talent attraction, employee engagement and the future of work. She is the founder of RC HR Consulting.
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