Plant Closing and the vital role of Human Resources


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Management training seldom includes plant closing. This process is usually learned on the job,  and the involvement and role of human resources (HR) is mostly overlooked. The inclusion of HR in plant closing is integral and has a substantial effect on the positive or negative outcome. The earlier HR is brought into the planning of the closing process the more likely there will be a positive outcome for employees and bottom-line for the company.


When a plant closes there is an inevitable issue with the employee/employer relationship. The news of closure hits hard and always creates employee distress.  Every employee will have some level of anxiety from feeling unsure about their financial security and future livelihood. This will also result in distrust and a diminished view of their employer. Human resources have the difficult task of bridging this gap. No matter how well trained and prepared a company may be for this situation, employees are individuals and require consideration that cannot be achieved by a machine or formula. It is the responsibility of HR to accommodate the well-being and legal rights of employees while supporting also the interests of the employer. Proper planning will address many issues before they arise, subsequently smoothing the transition for all parties involved.


Issues of employee distress following announcement of the plant closing will need to be addressed prior to disclosure. Human resources input is necessary to asses each employees assigned task, disciplinary record and overall job performance. This assessment will be used to plan staffing needed to complete the plant closing. Any time a plant closes there will be employees that do not react well to the news. Part of the assessment process is to identify employees, supervisors and managers that are likely to be difficult, causing unnecessary distress for the employer as well as compliant employees. Potentially difficult employees include those with financial hardship, couples that are both employed at the plant, employees that have very little or no social life outside of work and employees with past disciplinary problems at work. Tasking potentially difficult employees with functions that are part of the closing process will reduce what otherwise would be a long process of accepting that the plant is in fact closing. This can also divert potentially difficult employees from thoughts of disruptive behavior and practices. The preliminary employee assessment will be also be used to identify those that the employer would like to absorb into a different part of the company. Most successful companies maintain a good practice of hiring from within and put a lot of effort into employee retention. Human resources ability to provide detailed, thorough information to the employer is vital when deciding if an employee is worth retaining. A detailed on site employee database detailing job performance, special skills and disciplinary history will streamline this process. Up to date personnel files and human resources recommendations will also be considered. There will be some employees that refuse or are not able to relocate, and there will also be some employees who simply are not needed after the plant closing.


Deciding when to inform the employees of the plant closing is a delicate procedure involving many variables. Research of similar situations, Analysis of the pending plant closure and detailed evaluation of possible outcomes should be considered when making this decision. Advanced notice is more likely when the plant closing is due to reorganization of the company; less notice is expected when closing due to a failing economy. Poor work performance and disruptive behavior are less likely when employees are given an explanation, full disclosure and adequate advanced notice. If advanced notice is given too early it could encourage sabotage as well as being understaffed due to premature, substantial employee turnover. Proper planning, employee assessment and identifying of potential problems can prevent these issues from manifesting.


After announcing the pending plant closing, Human Resources will most likely be overwhelmed with questions, concerns and possibly threats. At this point HR must establish a well outlined process for employees to address their inquiries. Employees will feel more at ease if HR has an efficient, well informed line of communication. Employees may not get the answers they want but it’s more important they feel they have been heard, and that the right HR has the ability to answer them without first consulting their employer. Establish control of the process. Implementing programs to help the transition process can be beneficial. Providing direct contact with employment agencies along with company skill assessments and referrals can increase future employment opportunities for employees that have been displaced, resulting in a reduced number of unemployment claims. Offering time off for employment search and providing retraining benefits will improve the bottom line as well. Comprehensive knowledge of employees/employers legal rights is an imperative function for HR. Easily understandable; up front answers to legal questions will prevent most employees from filing legal complaints against their employer. There are applicable Federal and individual state laws that HR should have readily available information on.


Human Resources act as the conduit between employee and employer. Keep in mind that early inclusion of HR in the plant closing process will likely result in a positive outcome for everyone involved.