The Worker Adjustment and Retraining Notification (WARN) Act is a federal law that requires employers to provide at least 60 days advance notice to employees of a plant closing or mass layoff (Department of Labor, n.d.). The WARN Act’s main goal is to provide employees and their families some transitional time so that they can get ready for the loss of their jobs, look for and get new opportunities, and, if required, enroll in skill training or retraining that will help them compete successfully in the job market. The WRAN is done to help people, and its purpose seems to be successful for both employees and employers.
In the situation described, the company is closing the plant with only two days notice to employees, which would appear to be in violation of the WARN Act. The pros of providing 60 days advance notice to employees include allowing them to prepare for the loss of employment, look for new jobs and plan for their future. Additionally, it can also help mitigate morale issues and negative impact on the community. The cons of this decision are having additional costs and prolonging time to employees. The cons for the employer might include the possibility of losing additional business during the notice period and the additional cost of providing the notice. The pros for the employer are having longer time to think about the working decision and reduction of stress.
The management’s human resource plan of action for the immediate plant closing is not the correct plan as it is in violation of the WARN Act. It is important for the company to comply with the WARN Act to avoid legal repercussions and also to demonstrate ethical treatment of employees during the closing. Alternative plans that the managers and HR department can consider may include strategic planning to identify and address the underlying causes of the company’s financial struggles, with the goal of turning the company around or finding a new major account.
To avoid further financial struggles and plant closing, the company can conduct a thorough analysis of the current market conditions and identify new opportunities for growth. This can include developing new products or services, expanding into new markets, or finding new major accounts to replace the lost one. The managers and HR department can work together to create a comprehensive business plan that addresses the underlying causes of the company’s financial struggles and lays out a roadmap for turning the company around.
Moreover, to assist employees in finding new employment, the managers and HR department can provide job placement assistance and training. This can consist of creating a job search database, connecting employees with local job search resources, or even providing financial assistance to help employees cover the costs of retraining or relocating for a new job. In addition, HR managers can offer generous severance packages to compensate employees for the short notice of the closing (Macke and Genari, 2019). This can include a combination of financial compensation, such as a lump sum payment, extended health benefits, or outplacement services to help employees find new jobs.
One more strategy is to maintain trust and credibility with employees. This can be done if the managers and HR department communicate clearly and transparently about the reasons for the closing, the steps being taken to mitigate the impact on employees, and what assistance will be provided to them (Boon et al., 2019). For example, holding employee meetings, sending out company-wide communications, or even creating an employee assistance hotline for employees to call with questions or concerns.
Overall, the company should take the appropriate steps to comply with the WARN Act and to demonstrate ethical treatment of employees during the closing, while also considering the broader impacts on the workforce, community and the company’s long-term prospects. By implementing these alternative plans, the company can mitigate the negative impact of the plant closing on employees and the community, while also positioning itself for future success.
References
Boon, C., Den Hartog, D. N., & Lepak, D. P. (2019). A systematic review of human resource management systems and their measurement. Journal of Management, 45(6), 2498-2537. Web.
Department of Labor. (n.d.). Worker Adjustment and Retraining Notification (WARN) Act. Web.
Macke, J., & Genari, D. (2019). Systematic literature review on sustainable human resource management. Journal of Cleaner Production, 208, 806-815.