Published on September 25th, 2012 by Alan L Sklover
“It is not necessary to change.
Survival is not mandatory.”
- W. Edwards Deming
ACTUAL “CASE HISTORIES*”: Howard had been a regional banking executive for over 17 years, rising in time to a Senior Vice President of Operations. At 59, he saw this job as – hopefully – his last job, one he would hold until he and his wife decided it was time for him to retire. But, as the Yiddish saying goes, “Man plans and God laughs.”
As a wave of consolidation hit the entire banking industry, Howard’s employer and its chief competitor merged, and everyone knew position eliminations would surely follow. That was especially the case in his area – operations – as a primary justification for the merger was to enable cost reductions by elimination of unnecessarily overlapping administrative costs.
Bearing in mind his age and the poor job market, as well as the fact that his hefty compensation package made him a likely target for budget-cutting, Howard and his wife consulted us to determine a best course of action. What they had in mind was seeing how Howard could position himself for the best possible severance package. We do a lot of work in helping people “navigate” these perilous waters. In talking it over, though, we saw quite clearly that an alternative possible goal might be pursued, as well: “Survivor Demotion.”
You see, over our many years of working with executives worldwide who have lost their jobs in the course of restructurings, downsizings and other events resulting in position elimination, many of our clients have said to us, “I wonder why they didn’t offer me the other jobs that were available, instead of giving them to less experienced and less valuable colleagues?” In fact, in many instances, when we later communicated with supervisors and others who made the “Who Goes – Who Stays” decisions, they have many times said to us, either “It never occurred to me to ask him to take a demotion” or “I didn’t think she would have been interested in that alternative.”
For Howard, “Survivor Demotion” was a perfect fit. His kids were grown and on their own, and all of their educations had been paid for, leaving him and his wife with the ability to live on a somewhat reduced income. In addition, Howard actually yearned for a more limited role, and a less taxing set of responsibilities, for some time now. In fact, his cardiologist had recommended exactly that for years. Moreover, Howard’s primary expertise – systems analysis – was always more interesting to him, and far preferable to him than the broader field of operations. And, last but not least, Howard did not at all relish the idea of being unemployed on his next – that is, 60th birthday, and perhaps far beyond. So many of his friends in their 60’s simply could not find new jobs.
With our assistance, Howard made a proactive and professional “pitch” for a “Survivor Demotion,” that is, assignment to a position somewhat lower than his own, at a somewhat lower compensation, but one that was not slated to be eliminated in the course of the upcoming consolidation. In fact, because his new role was to be in systems analysis – his favorite subject matter – it was highly secure, as it was central and crucial to the upcoming integration of systems for the two soon-to-be combined banks.
A postscript: Howard’s boss, the Chief Operating Officer, was initially shocked to receive Howard’s proposal, because he thought that, for sure, no one would ever seek a demotion. In truth, he feared having to make a difficult decision as to the fate of a good friend. And, so, he came to welcome Howard’s proposal for a “Survivor Demotion.” The story’s ending is the best: Howard’s boss followed suit for the same exact reasons; they are both still employed by the merged bank, and apparently quite content.
LESSON TO LEARN: It may seem illogical and even self-defeating to propose a demotion in the course of uncertain times. How could a demotion be considered a positive thing?
An objective and logical analysis of the situation faced by many employees and their employers suggests that proposing a “Survivor Demotion” may best serve the primary goals and needs of both. Employees whose primary need is for job security are quite possibly going to be successful in this way. Employers whose primary needs are for lowered overhead while retaining top talent, are also quite possibly going to be successful in this way, too. It’s simply undeniable that in many situations, people of greater talent and experience – but unfortunately for them, higher compensation – are probable candidates for layoff.
And, too, since most organizational charts are generally pyramidal in shape, there are more positions available – and less relative competition for – positions at the lower level of the pyramid.
In every consolidation, restructuring, merger and downsizing, certain people are the decision-makers regarding “who stays and who goes.” Considering and addressing their likely perception of their own interests, goals and desires – and how they might coincide with your own – is not only wise, it may be a matter of “employment survival.” And retention of those with greater value – if only they might accept lower compensation and responsibilities – may address the decision-makers’ view of their interests.
“Survivor Demotion” is not meant for everyone. But if your circumstances and goals suggest it might make sense for you, consider it a very interesting “outside the box” possible alternative to job loss and severance.
WHAT YOU CAN DO: Here are 10 things to consider when thinking about the feasibility, practicality and advisability of your proposing a possible “Survivor Demotion” instead of layoff:
1. Consider, first, your own goals and needs: continuity of employment, a severance package, possibly a continuation by means of a consultancy. “If you don’t know where you want to go, chances are you won’t get there.” Every successful trip must begin with the intended destination in mind. Each person has different goals, and needs, and must weigh them all when considering what to do, and how to do it. And, too, every person has different resources with which to support themselves and their families while “on the path.” For some, keeping their present job is of paramount importance. For others, getting severance may be preferable, to acquire time and resources to enable a substantial career-transition or other life transition. And for still others, especially those who feel they are rapidly rising stars, the notion of a demotion might seem more damaging to reputation and future job prospects than even job loss might be. Your considering what is best for you and your family in the short term, the medium term and the long term is where you must begin your analysis.
2. Consider, next, who is the most likely primary decision-maker of “Who Goes and Who Stays.” Considerable thought needs to be devoted to this question: Who has the authority to give you what you seek? This is always a matter of estimation and speculation, but even more so in certain situations, such as mergers, when everyone is job-insecure. On the one hand, you need to go high enough in the chain of command to ensure you reach the level of decision-making, but on the other hand, preferably low enough to be a decision-maker as to staffing on your level. Keep in mind that Human Resources representatives rarely make such decisions, but are usually the ones who announce and put into effect the decisions already made by others.
3. Focus on your decision-maker’s perception of his or her own interests, needs and goals, and how giving you a “Survivor Demotion” might enhance them, for those perceptions are the keys to your getting what you want. Don’t think that decisions that are going to be made will be based on “fairness,” on your view of what makes sense, or what you deserve or need. Sure, those things may play a role in a decision-maker’s decisions, but they will not motivate him or her to make the decision you seek. Consciously and subconsciously, we all make decisions based in good part on “How will this affect my own personal interests, needs and goals?” The proposal you should make should be framed around the following “value proposition”: “If you accept and put into effect my proposal, it will (a) solve a problem you face and/or (b) help you get what it is you seek.” That is the ultimate motivator, and the essence of negotiation.
4. An important factor to weigh is the potential effect a “Survivor Demotion” may have on pension, profit-sharing, and vesting (or exercise) of equity awards. Is a “Survivor Demotion” good for you? Well, it is quite probably preferable to have some job than no job at all. That said, don’t forget to weigh how working longer for this employer might (a) give you more time on the job to receive vesting of unvested equity or other financial benefits; (b) be factored into your financial pension or retirement calculations, as some calculations are made, for example, on “income during the last five years of employment”; (c) might interact with the timing and extent you can collect Social Security benefits; (d) make you a possible candidate for a later layoff; or (e) end up with your losing out on an opportunity to collect a very significant severance package.
5. Of course, a “Survivor Demotion” should be a “conditional” request, that is, “only if I am otherwise slated for layoff, downsizing or position elimination.” The essence of a request for a “Survivor Demotion” is that “if and only if I am to be let go, the better alternative would be to put me in a position in which I can continue to support you and the company.” That said, a proposed “Survivor Demotion” should indicate or express a certain level of enthusiasm, and never resentment or anger over the circumstances or toward those whose decisions brought them about. Positive attitude is critical at this time and in this context.
6. In preparing a “Survivor Demotion” pitch, identify associated risks, and try to reduce or eliminate them. Every step forward in life entails potential risks and rewards. Sure, “volunteering” yourself to take a lower level of compensation and responsibilities may be premature, be unnecessary, or suggest to someone, if you’re not clear, that you want to be demoted over any other alternative. That said, you cannot imagine the number of times clients have said to us, “I would have gladly taken one of those other jobs given to my underlings, if only they had made that offer to me.” “Survivor Demotion,” done well, (a) limits the downside risks through clarity, and (b) is proactive about those other positions, only enhancing the chances that one would be offered to you, instead of your supervisor being certain in his or her own mind that “I’m sure he (or she) would never have accepted that lower position.”
Several of our clients have included in their “Survivor Demotion” pitches reasonable, “soft” assurances that the likelihood of being laid off from any lower level of responsibility would be minimal, for at least one or two years. Some have even requested that, if laid off in one or two years, their severance package would be no less favorable than the severance package offered to them at this time.
Also, proposing a “Survivor Demotion” by email makes a permanent record of your willingness to do whatever is necessary to avoid layoff, and so only increases the sense among decision-makers that they have little or no choice but to keep you on in some capacity.
7. When pitching a “Survivor Demotion” proposal, always address why and how the Decision-Maker’s interests, goals and needs are furthered, not your own. When you pitch a “Survivor Demotion” make sure that you are clear about the many reasons this would be in the interests of the “Who Goes and Who Stays” decision-makers, including: (a) lower overhead: lower overhead for the same employee; (b) no or less retraining downtime: avoiding the potential problems associated with having to train and orient a substitute; (c) continuity of operations: by keeping people on board who know “the way things work”; (d) avoidance of relational risk: continuity for clients, customers and vendors, who might otherwise have difficulty with newcomers; (e) lower severance costs by layoff of those with lower compensation; (f) minimized morale problems; (g) retention of legacy knowledge; and (h) protection from reputational risk associated with loss of those who are well-known in the industry, just to name a few, among many others.
8. Don’t be afraid to be “creative.” Some of our clients have used the “Survivor Demotion” strategy to request retention for a limited period of time, say six or 12 months, motivated by their own need to remain employed until vesting of additional equity awards, or their reaching a certain level of service and age to provide for greater retirement benefits. Others of our clients have used this approach to suggest not a “demotion” but to propose instead continued service as a consultant, thus establishing their former employer the first client of their newly established consultancy businesses. (As anyone and everyone who dreams of the independence of being in business for oneself, a first client is a wonderful thing.)
One client managed to get both continued employment until she reached full retirement benefits, and then also qualified for a hefty severance package. The message: don’t be afraid to be creative when navigating and negotiating in this context: all that really counts is your perception of value and cost to a decision-maker.
9. Since you will probably be the only person considering this “employment survival” strategy, it would probably be wise not to share your thoughts with your colleagues. As a general rule, any request is easier to accommodate if only one person is making it. It is not at all common for employees to propose a “Survivor Demotion.” Accordingly, if you find that your circumstances and goals suggest the wisdom of making a “Survivor Demotion” proposal, don’t mention it to others. Be the only one to make the request, and you will more than likely be the only person to be granted it, while others are let go.
10. In almost all situations, the best “pitch” is (a) an in-person presentation, (b) promptly followed by a written explanation. Studies have shown that, when you have a direct personal interaction – not texting, “skyping,” or voicemail – there is something of a neurochemical connection established between the two interacting parties. Thus, it is almost always more effective to make an important pitch in person, if at all possible. And, it is hardest to say “No” to such an in-person proposal. Imagine a person asking for a charitable contribution at your front door, as compared to a request for a charitable contribution by mail or email. Then ask yourself “Which would you have a harder time saying ‘No’ to?”
Conversely, it is also most effective if you follow up your in-person pitch with a detailed, written proposal so that the person you pitched to (a) has a complete description of what you are proposing, (b) can easily transmit it to others to put it into effect, (c) cannot forget item 3 or item 5 on your list of 7 reasons why it is a good idea, and (d) is far less likely to misconstrue either what you said, or any conditions you may have placed on your proposal.
For these reasons, and others, we suggest a two-pronged approach to all important proposals you may be considering making at work.
Interested in making a “Survivor Demotion” request, but not sure what to say or how to say it? To assist you, we offer a Model Memo entitled “Requesting a Survivor Demotion in Lieu of Layoff.” To obtain a copy, just [click here.]
SkloverWorkingWisdom™ emphasizes smart negotiating – and navigating – for yourself at work. Negotiation of work and career issues requires that you think “out of the box,” and build value and avoid risks at every point in your career. When facing a likely or imminent layoff, there are few alternatives available to you. One of the few available to you - Requesting a “Survivor Demotion” may be the best path forward for you. With these 10 pointers, should you decide that a “Survivor Demotion” is the right thing for you, you’re prepared to effectively request one. Now the rest is up to you.
Always be proactive. Always be creative. Always be persistent. Always be vigilant. And always do what you can to achieve for yourself, your family, and your career. Take all available steps to increase and secure employment “rewards” and eliminate or reduce employment “risks.” That’s what SkloverWorkingWisdom™ is all about.
*A note about our Actual Case Histories: In order to preserve client confidences, and protect client identities, we alter certain facts, including the name, age, gender, position, date, geographical location, and industry of our clients. The essential facts, the point illustrated and the lesson to be learned, remain actual.
Please Note: This Email Newsletter is not legal advice, but only an effort to provide generalized information about important topics related to employment and the law. Legal advice can only be rendered after formal retention of counsel, and must take into account the facts and circumstances of a particular case. Those in need of legal advice, counsel or representation should retain competent legal counsel licensed to practice law in their locale.
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