Downsize seasonal layoffs, not your team
The US labor market has seen a nearly 200% increase in layoffs in 2023 over the previous year. Tech, healthcare, and retail have been the hardest hit industries and, despite forecasts of a half million seasonal hires in the retail sector, the end of the holiday season will bring another wave of layoffs. Job loss can be one of the most disruptive events in a person’s life, particularly in the United States where health care is often tied to an employer. A variety of economic factors drive cycles of layoffs but to the extent that they are predictable – are they also avoidable?
In 1993, Rhino Foods was faced with the issue of excess staffing brought on by efficiency improvements and the seasonality of the ice cream industry. Ted, the owner of Rhino Foods, wasn’t interested in laying off employees. Instead, he turned to his staff to explore creative solutions to reduce the staff while maintaining well-trained employees for the long-term.
Through a series of meetings, the concept of the Employee Exchange program was born. It is simply an exchange of employees between companies with opposing seasonal business cycles. The benefits to the companies are avoidance of seasonal layoffs, retention of well-trained staff, and increased employee morale.
This year brought a much more significant threat of layoffs to Rhino. Based on our sales projections we were carrying significantly more staff and were anticipating running fewer lines for an extended period. Suddenly, the typical Employee Exchange Model, of three to five employees temporarily working for four to six weeks, was not going to work. Instead, we were faced with trying to place 20 employees for a five-month period.
From a business perspective, carrying 20 additional people would have resulted in either laying off team members or keeping everyone but not being able to consistently provide 40 hours of work per week. If we did go through with layoffs, we would have also dealt later on with the almost impossible task of hiring 20 or more people in a short amount of time as we look to ramp back up for the busy season. Sufficive to say, we were looking at a situation that would have been bad for employees and bad for business.
As a result, we needed to think more expansively and creatively about our Employee Exchange partnerships. Major factors that we considered when trying to identify partner companies were:
Type of work: Identifying potential partner companies that require or complement the manufacturing skills our employees offer.
Schedule: Attempting to maintain a similar schedule for our employees. Schedule considerations included length of shift (Rhino runs an 8 hour shift whereas some companies run 10 or 12 hour shifts), the start and end times of shifts (we are a 3 shift operation so identifying partners who have opportunities beyond a first shift timeframe allowed more opt in opportunities for employees working 2nd and 3rd shift) and start and end times of shifts (trying to find companies with similar shift times in order to reduce disruptions to the schedule)..
Accessibility: Identifying partners who are easily accessible knowing that many employees utilize public transportation.
Fortunately, we were able to identify 4 potential partners interested in trying to set up an Employee Exchange program. Four months in, the partnerships we were able to establish this period are going well. Vermont is struggling with an aging workforce and a low unemployment rate. The partners we identified didn’t necessarily have opposing seasonality in their business cycles, but they needed additional employees to meet their headcount. The partnership meant they could quickly take on a cohort of hardworking employees with manufacturing experience to support their overall needs.
Once placed, we remain committed to supporting our partners and employees over the course of their exchange. Our People & Culture team has weekly check-ins with our partner’s team to check in and address issues in a timely manner. Additionally, Rhino’s Operations Supervisor visits the partner site weekly to check in personally with employees. We worked to ensure aspects such as Open Enrollment, company CTO days (we observe different holidays from our partner) and our annual company meeting were taken into consideration for our employees on exchange. Creating a strong collaborative working relationship with our partners has proven to be a key to the partnerships’ success.
We have been asked, how does this program work and what does it take to make it sustainable? At its core, a two-way relationship built on trust and mutual investment are essential to our Employee Exchange program’s success. When identifying employees to participate in the exchange, we asked for volunteers and really sought out employees who would be strong ambassadors for Rhino. Additionally, we are open and honest with our employees about why this exchange is important and how it can positively impact our business and our employees. This is an “opt in program” meaning that we took the time upfront to answer questions, take employees to the exchange site to understand the job and its components and were understanding if along the way the needs of the employee changes.
The Employee Exchange program is just another example of the innovative workplace practices that champion employee financial stability and make good business sense that the Rhino Foods Foundation is working to spread. If you’re interested in putting together and Employee Exchange program in your community, check out the resources here to get started.
