Attorneys

• John E. Lyncheski

Related Practices

• Healthcare Business
• Labor and Employment

The Balanced Budget Act (“BBA”) is forcing healthcare to tighten its belt. Healthcare executives are being required to find ways to operate more efficiently and economically. Like it or not, every healthcare executive has to consider redesigning and/or downsizing the workforce in response to the BBA. They’re rolling up their sleeves, bringing in consultants and developing what seem to be surefire plans for streamlining operations without affecting patient care.

If administrators are not considering employee reaction to their plans, however, they could be in for a rude awakening when it is time to announce and implement the plan for redesigning the workforce.

Somewhere along the line, workforce redesign has become a dirty word to employees. Executives and workforce redesign consultants may be getting so enamored of the logistics of the redesigning process that they’re not sufficiently sensitive to the concerns of employees who experience the consequences.

Part of the problem stems from the fact that many organizations use redesign or reengineering as euphemisms for a reduction in force, thinking that they’re cushioning the blow. On the surface those executives may consider the difference between “reengineering,” “redesign” and “layoffs” as pure semantics.

A genuine workforce redesign effort typically reallocates the workforce creatively rather than just through layoffs. But because of the predisposition to view redesigning as merely a euphemism, the excitement that management feels over redesigning is often times met by the opposite reaction among employees.

A goal common to most workforce redesign, regardless of the industry, is to break down the walls between departments, regions and divisions by examining common processes and streamlining them to best serve customers.  Redesigning thus often involves cross-training employees or changing their job responsibilities. For a long-term employee who may have been doing the same job for years, redesigning can cause stress and uncertainty, even if it does not lead to a layoff.

If employees are moved around an organizational chart like pawns, they will act like pawns. Employees want and deserve straight talk. Employee perceptions are their reality and must be taken seriously.

The key to making a workforce redesign plan work as well in reality as it does on paper is to engage in active dialogue with employees. A surprising number of employee fears can dissipate when management not only communicates, but also genuinely listens and responds. Employees will feel better by venting some steam, and out of that venting will come significant employee concerns, many of which the employer can address beforehand and diffuse an otherwise volatile environment.

In short, executives must marry employee perceptions to reality before they can expect unfounded employee fears to go away. Cursory memos and pep rallies about change will be dismissed as patronizing. Focusing only on the benefits of redesign to the business will lead to resentment and distrust. Employees typically view management’s actions and reactions in response to the BBA as “bottom line” oriented and relatively “coldhearted” when it comes to the impact on employees. Employers should be prepared to show, not just tell, how redesigning the workforce will benefit employees and to illustrate each benefit. In particular, employers must illustrate how workforce redesign will fortify rather than jeopardize job security.

Employee fear of job loss can paralyze operations and kill morale if managers are ineffective in convincing them that the redesigning process does not jeopardize their jobs. As, or even more, important as communication to and with affected employees is communication with front line managers. If your managers do not buy into the changes in redesign, you can expect that they will foster employee resentment and discontent. Managers at all levels must thoroughly understand what is happening and why and must be prepared to explain the redesign and the reasons behind it to the employees they supervise. It is critical that managers be cultured and convinced to speak in terms of “our” redesign rather than “their”— administration’s—program. Otherwise, the program will be met with a “them vs. us” attitude by the workforce.

It’s also highly possible that employee fears about job security arising from workforce redesign could increase union activity and/or incumbent union militancy which could present a new set of challenges to consider in the redesign scheme. For example, union contract stipulations could affect the organization’s ability to deploy workers with maximum flexibility, particularly when attempting to combine into a single job tasks associated with separate bargaining units. Managers could encounter obstacles in attempting to use covered employees to perform “nonbargaining unit work” and of “nonbargaining unit employees” to perform bargaining unit work.

Labor contract restrictions may also hinder staffing flexibility if the organization must use multiple employees to perform the work, which runs counter to basic workforce redesign themes of having one employee wear many hats. Implementing job-sharing programs and transferring employees from one bargaining unit to another could face constraints from outdated or ill-advised contract provisions.

A negative employee or union attitude could result in the workforce redesign being challenged at every step. Even if the employer ultimately prevails in legal proceedings initiated to impede the redesign program, the result is additional cost and a demoralized workplace.

Finally, employers must recognize that the employee insecurity often associated with workforce redesign efforts frequently drives employees to seek out unionization in the mistaken belief that it will provide short-term job protection. Employers that fail to pay heed to employee perceptions and fears over redesigning virtually invite such outside intervention.

Looking at workforce redesign from the employee point of view is essential for management to understand why employees react so negatively to something managers view in a positive light. To ignore the inevitable employee reaction to redesign is to close the door to employee support while inviting in dissention.

Employers planning to redesign their organization in response to the pressures of the BBA will avoid short term, and possibly long-term, complications by paying close attention to the concerns and fears of their employees. From the employees’ perspective, workforce redesign is fast becoming a dirty word. It is extremely important that employees feel that they have a voice in the process.  Don’t underestimate the need for effective two-way communication when implementing a workforce redesign program; it can diffuse unwarranted employee insecurity and mistrust. Then, before implementing the redesign, step back and put in place safeguards and procedures designed to treat affected employees as fairly as can be. Above all, ensure that each affected employee is treated with dignity and respect in every way possible in the transition. Treating your employees with class in a workforce redesign is a small investment that will pay huge dividends in the long term.

For more information, please contact John E. Lyncheski at jlyncheski@cohenlaw.com.