Transition Manager: Delivering Tangible
Return on Investment

Meet Financial Targets

Among the many challenges presented by a separation event, cost reduction and cost avoidance are of paramount importance when trying to meet financial targets. As cost reduction is often a primary driver of RIFs, understanding whether the proposed changes will meet cost reduction targets is critical to success. In terms of cost avoidance, it is imperative to minimize unforeseen costs such as off-payroll delays, inadvertent overpayments and unplanned administrative expenses which can cause significant cost overruns from the original plans. Transition Manager enables organizations to reduce and avoid costs through:

Event Analysis and Monitoring — Each event starts with specific goals and objectives. However, these are often forgotten in the chaotic, intense environment of a restructuring. Because Transition Manager captures the original objectives as well as all of the decision data, reporting on 'performance to plan' is a click away. Likewise, management can instantly test whether a proposed scenario will meet the financial objectives and make modifications before taking any action.

Off-payroll delays — Decision changes, reporting delays, administrative errors frequently delay severance dates. This results in retaining employees on payroll for an additional cycle. For example, a minor delay of two weeks in a 1,000 employee severance event would cost a company $2 million (average $50k salary) in extended payroll alone. With the automation in Transition Manager, changes are instantly processed, eliminating unnecessary delays.

Mistaken Overpayment — Manually calculating severance payments or updating dependent systems exposes organizations to potential overpayments. Improperly calculating severance, vacation hours and bonus payments, or failing to stop payments to ex-employees can result in millions of dollars in erroneous - and usually unrecoverable - costs. By managing calculations and system instructions, Transition Manager removes the potential of human error and minimizes your exposure to the risk of overpayments.

Administrative Cost Avoidance — Many larger RIFs are implemented by hiring a pool of temporary administrative personnel to manage the processes, calculate severance packages and produce paperwork. Not only are the costs high for this additional labor, but the costs of errors and error mediation often go unnoticed.

Transition Manager takes the risk of administrative errors out of the equation in order to manage workforce separations large and small to a predictable cost. Customers have experienced a 50% reduction in administrative costs when using the solution. Additionally, one customer cited a cost savings of $278 per separated employee due exclusively to error reduction. In separation events effecting hundreds or thousands of employees, these figures very quickly become significant.

Avoid Risk and Uncertainty

By nature, workforce transitions place companies at risk. If managed incorrectly or without regulatory compliance, RIFs, outplacements or layoffs could prove extremely costly. Internally, the stress and pressure caused by workforce transitions can damage morale, stall productivity and trigger the loss of top talent. Transition Manager helps to mitigate risks, including legal, compliance, personnel and more.

Legal Issues — Wrongful termination lawsuits have become commonplace. Without decision consistency and the audit trail to prove it, organizations have to bring their checkbooks to court to pay legal fees and judgments that can quickly swell into the hundreds of thousands or millions of dollars. Many companies actually plan for defending themselves against a small number of lawsuits as part of the layoff planning.

Transition Manager customers have carried out RIFs large and small without a single legal action against them. Transparency into decision making, proactive reporting and full audit trails combine to create a fact-based, defendable position that eliminates arguments before they begin.

Compliance Issues — The WARN Act, Adverse Impact, Age Distribution, ADEA, Union Labor Contracts, SOX 404 policy, Older Workers Benefit Protection Act, and other regulations each prescribe specific analysis, reporting and notification. Calculated and managed manually, regulatory compliance is fraught with details that, if missed, could lead to legal action or fines.

Transition Manager helps mitigate this risk with pre-defined reports and metrics that instantly reflect the regulatory impact of the proposed RIF. Reports that usually take days are available instantly, significantly reducing cycle time in the separation process.

Identify and Retain Key Talent

Numbers and paperwork do not account for the potential damage to an organization's most valuable asset, its workforce. Often accounting for up to 70% of an organization's costs, the workforce can become much more expensive after a poorly managed transition, RIF, or layoff.

On average, a company spends $13k to $23K per hire and $19K to $24K per separation. If one employee with a critical skill set is erroneously let go, it could be a fifty thousand dollar mistake - or more - plus the productivity reduction from the unfilled position. Additionally, hiring a replacement on the open market may require higher compensation, effectively negating the financial benefits a severance event was supposed to deliver.

On personnel issues, Transition Manager helps to identify critical talent, ensure key people are retained and protect the morale of the entire workforce.

Top Talent Retention — Prior to implementing a RIF or other severance event, teams can quickly pinpoint key employees or skill sets, then block those individuals from separation. Particularly important in voluntary events, this reassures key people that they have a future with the organization and dissuades them from starting a job search. If an organization has to hire back key talent, it usually comes at a cost of about 140% of their former compensation.

Preserving Morale — Managing workforce separations in a considered, consistent way shows the remaining employees that the company takes a careful, well thought out approach to decisions. This improves morale internally, and also improves the external image of the company as departing employees leave on positive terms.

Ensure Smooth, Effective Transitions

By providing web-based strategic oversight, risk management, decision support and process management, Transition Manager facilitates smooth transitions from start to finish.