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RealTime IT News

When The New Rich Become The New Poor

For many people working on the World Wild Web, those words have been the first in a sentence that ends with sacking, dismissal or retrenchment. Among them, this week, 171 employees of Looksmart. An ironic rising bodycount in what was, only six months ago, a 'war for talent.'

Employee relations will become an increasing flashpoint for web companies. In the case of Looksmart, senior managers called all employees to a special 7:45am meeting to inform them of their job losses. "Shot at dawn," is how one employee characterised the situation.

That is bad news for re-integrating our once valuable 'knowledge workers' back into the labour market. According to research by Dr Lea Waters at Deakin University, people who have little, or no, control over their dismissal will not engage in what Waters defined as "pro-active coping behaviours," the sort of tactics that can help overcome any sort of loss. "The way people exit the organisation is likely to influence their psychological reaction to unemployment," she writes.

According to John Ferguson, a consultant to employment services firm Jobline Australia "Generally effective employee communication, tempered with a knowledge of how communications are handled," is a good start to retrenching people and minimising the damage. In Ferguson's experience, what's called for is a balance of the right amount of information.

"Rumours are always rife," says Ferguson, "Come out too often with information about possible retrenchments, and all you do is scare the hell out of employees." Ferguson suggests better communication right throughout the organisation will help.

One former senior editor, who wished not to be named agreed with this, saying it was a little like coping with a death. "Anger, denial, negotiation, acceptance, celebration," he said, outlining the stages he observed, "Something like that. They always happen sequentially."

"It's like you get better at it," said the employee, whose anger subsided to the point where he could see the economic sense in his dismissal. "What we will learn is a more elegant way of retrenching people."

With more than fifteen years experience in management, Mel Bohse, currently MD of Alta Vista Australia, says it's more like a divorce. "And it affects people exactly that way, they leave thinking they haven't done their job well. For Bohse, it's important that when staff are told their jobs are gone, honesty is the best policy.

"If you are honest and communicate why this is happening, and tell them that it's not a personal choice, that you are not picking on them, staff leave the company with a better feeling towards it. Staff hear rumours too, and if you are not giving them honest information, theyll inwardly focus."



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