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In today's economy, many companies are facing tough decisions about their employees. If forced to downsize, who's integral to the organization and who's not? Making the right decisions is a challenge. So is motivating the survivors who may find themselves working in an environment of fear. And when companies are making those cruel cuts, how can they soften the blow?

To explore these issues, Business Incubator attended a seminar on 'people strategy', hosted by Fuller Landau LLP in Toronto, and tapped into the panellists' expert advice.

The panellists:

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Mia Wedgbury, CEO and founder, High Road Communications, a communications and marketing company in Toronto.

Christine Hirschberg, manager, HR, Pita Break, a baked goods company in Toronto.

Bernadette Lonergan, director, HR, Fuse Marketing Group Inc., a creative branding and marketing company in Toronto.

Janice Kellar, director, HR, Cole Engineering Group Ltd., a civil engineering company in Toronto.

Jennifer King, director, HR, Fuller Landau LLP, a chartered accountant and consulting firm in Toronto and Montreal.

How do you motivate employees and create incentives in tough times when people are being cut?

Lonergan: It's tough. We work on transparency and openness because uncertainty is your biggest enemy right now. We tell them the truth so they don't make up their own reality. We ratchet up the flexibility factor because they're going to be working harder…and we celebrate when we can.

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Hirschberg: We do a lot of social events, inside and outside of work.

Wedgbury: What's more important than ever is investing in your senior team. We tend to do a lot of training for our junior team but if your senior team isn't motivated and inspired, they're not inspiring the rest of the team. Give them the opportunity to get out there to learn new things and bring that back to the organization.

Kellar: We involve employees in a lot of decision making that affects their day to day work. It's also important that leadership speaks to them on a regular basis so there's an open dialogue and an opportunity to ask questions about concerns.

King: Treating people as individuals and keeping them informed works best. It starts with communication. We're trying our hardest not to lose people.

What are some of the mistakes companies make when they downsize?

Wedgbury: One of the big mistakes is that they don't go deep enough the first time. A constant flow of downsizing announcements can really kill an organization.

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Lonergan: Doing it too slowly and not being transparent about why. So they do death by 1,000 cuts and everybody's looking over their shoulder.

King: Often it's because they've hired wrong…when they were desperate and didn't take the time.

Hirschberg: Or they hired too many when the forecast wasn't there.

How do you ensure a good fit?

Lonergan: It's the hardest thing to do. We use a broad group of people for interviewing and a consistent interview experience, so you don't get 'like' people hiring 'like', which often happens.

Kellar: The more people you have involved in the hiring process, the more chance you have of getting a good fit for your team.

Hirschberg: If we're not sure of our forecast, I'll bring in a few agency workers for that period. Many times I will hire them full-time at the end of their contract.

Wedgbury: One trend I see is that there are a lot of people out there in the pool, so companies are just leveraging their own internal networks. But you still want to be using the best strategies to recruit people from current jobs and not just from the pool that's unemployed. And make sure there's a cultural fit. It's more than just a skill set.

Lonergan: It's a non-stop process. We look for good people all the time. Often you get a good person, but you don't have the role. Then the role happens.

King: We try to be very open about the good, the bad and the ugly of our firm.

Is there a good way to fire people?

Lonergan: Employment relationships are never forever. They do end, sometimes in ways that people wish hadn't happened but rarely do they have to be miserable experiences.

My rule is to make sure you're as fair as you can be. Do it cleanly, quickly and with as much generosity in the exit package as you can manage. Most people will emerge relatively unscathed.

Kellar: The worse thing is to surprise an employee. If they haven't had some warning or an opportunity to improve beforehand, then it's not going to go smoothly.

Wedgbury: Be as open and honest as possible. It's also an opportunity for people to reinvent themselves. We talk about, "Let's not waste a crisis". If it's not the right fit or there's a reason you're making that decision, it can actually help that person to move into a new role.

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