The Ethics of Downsizing

downsizing_1During the past several weeks we have read about major staff reductions taking place across the Jewish world. Tens of valued professional Jewish communal workers along with competent and loyal administrative and support staff have received pink slips – in some cases they were given just two days notice to clear out their offices – as their jobs were being retrenched. These costs saving measures are not unique to Jewish organizations and have been seen thorough-out the public, private and not-for-profit sectors the world over. However, these massive layoffs raise the issue of the ethics of downsizing and whether or not there is a Jewish approach to these practices, particularly when it concerns employees who work for the Jewish community.

No one is oblivious to the massive firings that have been taking place over the last eight months. As the recession has been felt in countries throughout the world we have witnessed not only the collapse of financial markets but also the retraction taking place in mutli-national corporations and among the largest manufacturers on all continents. More and more people are finding themselves unemployed, either the result of firms closing or staff reductions.

There is always a question of focusing on whether there is a better way to deal with retrenching staff (as a cost saving measure) and during these months we have witnessed a number of examples where employees have come together to help save their colleagues’ jobs.

Economists and financial advisors have made a number of suggestions which generally include reducing the work week as well as employees sacrificing a percentage of their salary to preserve their colleagues’ positions. Of course the major dilemma is whether these cost cutting measures ultimately result in enough savings to enable the work force to remain in place.

Perhaps one of the unique aspects in the world of Jewish communal service and the organized Jewish community is the role that Jewish ethics should play in guiding the decision-making of our institutions and our leadership. When Jewish Federations, as the largest employer of Jewish communal professionals in North America, began cost cutting measures how were their decisions reflective of Jewish values – particularly when we are dealing with employment, employees and service cutbacks.

We are all familiar with the Rambam’s conceptualization of charity where the most important aspect of assisting a person is to enable them to be employed and not to provide charity (as we refer to financial assistance today). This being the case, then the imperative would be to find a way to keep our communal professionals employed. Not only to enable them to earn a living but also because everyone is aware of the difficulties faced by those looking for employment. It is also far better to keep someone employed than add them to the already exploding rolls of the unemployed.

The question is, how does the central communal institution simultaneously deal with their decreasing income and also handle their own finances responsibility. One of the fundamental assumptions is that if there was no recession most of the employees would still have their jobs as they are not only competent but perform a valued service for the community.

Having said this, is there an alternative to the massive laying off of scores of Federation and affiliate agency staff?

There have been a number of private firms that have shown both leadership and compassion for their employees and there is much that we, the organized Jewish community, can learn from their example. Of course, it may not be able to save 100% of the staff positions, but the Federations have a responsibility and an obligation to both care for its employees and represent a Jewish approach to the challenges presented by the financial situation.

There are two possible approaches that if they are joined can potentially result both in serious savings of communal dollars and maintain staff positions so people are not let go in wholesale numbers.

In the same way employees in private industry have volunteered to accept a 10 plus percentage decrease in salaries (so that other employees might keep their jobs) this could be presented to the staff of the Federations in question. It does not take a rocket scientist to figure out that it is one thing for a professional on the senior level who earns above $150K a year to take a 10% salary cut and it is another for an administrative assistant who earns $35K to take the same cut so adjustments would need to be made. The point is, if the staff voluntary agrees to this move, it is not a result of an administrative or board decision, and it becomes something the employees agree to do for each other. The message is important and communicates a real sense of care and concern for those who work to make the organized Jewish community what it is.

In all likelihood this alone would not be sufficient. It might also be necessary for employees to adopt a four day staggered work week. The implementation of such a move would have to be planned so that the organization can continue to properly function. Managers and line staff would work together in all areas to reduce disruption and hopefully cause only minor inconveniences.

Some of us remember the recession of the early 1990’s when employees were let go – those involved in planning and program development were harder hit than those employed in the financial resource and development side. The same is probably also true today.

In dealing with the ethics of downsizing our communal organizations we have an opportunity to demonstrate both our leadership and our commitment to the Rambam’s approach to charity and the people we employ. Imagine the message the Federation system would be giving to the Jewish world, specifically, and to our greater society in more general terms.

I would challenge the UJC to consider coming up with a recommended practice based on these values that could be utilized by all Federations as they struggle during this difficult period. Working together, and with their vast collective wisdom, new policies and practices could be established that will serve as a model for all.

Even though a number of Federations have already implemented cuts and made difficult decisions it is not too late to assist others who are yet to face the need to retrench staff members. This is an area that is clamoring for both clarity and direction.

Let’s hope we can rise to the occasion. After all, it is in our tradition that we are a light unto the nations.

Stephen G. Donshik, D.S.W., is a lecturer at Hebrew University’s International Leadership and Philanthropy Program and has a consulting firm focused on strengthening non-profit organizations and their leadership for tomorrow. Stephen is a regular contributor to eJewish Philanthropy.