In the recent slowdown, it must have been difficult for management and HR managers to lay off collea­gues once part of the growth of the company. But does it really matter how layoffs are handl­ed? Going by the much-acclai­med customer relationship management principles it does.

In the real world, the process of retrenchment varied. Compassionate managements innovated ways to take care of employees. For instance, some offered employees the option of moving to low-cost centres; others offered relocation assistance or organised job fairs for laid-off employees; one company retai­ned employees on the payroll without a salary; a few shifted re­gular employees to contractual employment, and some gave two or three months’ exit noti­ce. Experiences at the other ex­treme were also noted. Some companies suddenly sealed laptops, seized files and handed in­cumbents a pink slip without any notice whatsoever. Worse were the instances where em­ployee vouchers were scrutinis­ed for discrepancies, such as in­correct TA or DA bills, traditionally ignored, and employees th­en threatened with termination on this account, if they did not themselves resign.

For employers who downsiz­ed ruthlessly in 2009, the chic­kens may come home to roost in 2010. With the Indian – and global — economy rebounding earlier and faster than expected, companies are once again scouting for talent. The yardsti­ck for employees evaluating co­mpanies has undergone a sea change, though. Where higher salaries once lured candidates in droves, job security and stability are the new watchwords. This is borne out by news re­ports in the past year that government and PSU jobs were sought out by a broad array of applicants, including management students. What’s more, headhunters and executive sea­rch firms are approaching well-heeled and well-qualified pro­spects with PSU openings — unthinkable two years ago.

Another key takeaway from the global slowdown: during troubled times, smart crisis management opens new windows of opportunities and separates minnows from masters. This is the time to invent new win-win models of existence that spotlight the company’s caring face by considering the employee’s welfare, whilst also keeping a sharp eye on the company’s bottom line. This is only possible when companies genuinely care and walk the talk by adopting transparent processes. When the going gets tough, people tend to believe that news about rough times erodes brand equity. Ask a brand management guru or a crisis management expert and they will reveal secrets that ethical long-term players have learnt over time. As the excellence theory goes – an organisation that maintains its reputation of nurturing an overall ‘open and honest’ policy with stakeholders and the news media suffers less financial, collateral and perceptual damage than an organisation that does not.

Companies that retrenched staff in 2009 may face more challenges in hiring in 2010. Would the ex-employees rejoin a previous employer who sacked them at the first sign of trouble? How companies harness relationships during tough times reflects on how employees respond to their call in the future.

That’s not all — even the new talent pool the company seeks to hire will most likely know how the previous employees were treated. Consequently, some may not join; others may sign the appointment letter but not come on board due to second thoughts; a few may sign the appointment letter but join another company where job security is assured. That’s not the end of the negative outcomes — those who do join co­uld have failed to secure other jobs and may therefore not be the most talented, while those without an option would come on board as ‘passengers’ and get off at the next station the mo­ment a worthwhile opportunity appears. In a nutshell, sacking employees during downturns has long-term consequences few companies may foresee.

Besides loss of tremendous societal goodwill, there may be collateral damage, too. With new media such as email, the internet, blogs, moblogs, social media and professional networks disgruntled employees can simply go online to wash the company’s dirty linen and attract a global audience. Assaults on companies in the virtual world can cause immense damage in the real world. Indeed, that’s a lesson some Fortune 500 companies have learnt the hard way.

But companies that did eve­rything to cut costs except tho­ughtlessly lay off employees may smile broadly in 2010. Su­ch firms will save time, mo­ney and effort now by not having to hire or rehire people. Best of all, employee morale will be high, with loyalty touching peak levels despite tempting offers. Th­ese caring firms will be better placed to ride the high tide of prosperity that’s inevita­ble after every cyclical low tide.

The writers are associate professors at Gurgaon-based Management Development Institute