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Closure, Layoffs and Learning: A Look at First Allmerica Financial’s Life Division
“Thank you. This is the best job I have ever had.” These are words every manager loves to hear.
“Thank you. This is the best job I have ever had.”
These are words every manager loves to hear. They were especially poignant for Irene Brank, director of life and annuity operations for the life division at First Allmerica Financial. For the past three years, she had been working in the most difficult of situations: managing and motivating employees facing almost certain job loss during a company closure. But the employees’ appreciation, the 95 percent retention rate and successful business transition all confirm Brank and her colleagues’ success, which they credit to learning.
A Difficult Decision
Life division leaders knew bad news was coming as early as 2002. As with many other companies, First Allmerica Financial had been damaged by the post-9/11 stock market plunge. After much consideration, the company decided to stop writing new life insurance policies after 150 years of business, which caused the first round of layoffs. A core group of employees was retained to maintain the life policies still on the books.
In 2005, the inevitable occurred — the company sold its life policies. This created a unique challenge: The 250-plus remaining employees had to service existing business while transferring knowledge to the acquiring company. Managers needed to motivate and retain staff members, even though they had been given tentative layoff dates up to 12 months into the future.
The potential for harm was great. Employees could decide to leave en masse, jeopardizing the transfer to the acquiring organization, or they could stop caring about their work and fail to accomplish what was needed. The worst-case scenario was that disgruntled employees would sabotage the business as retribution. To keep employees and transition the business successfully, First Allmerica Financial developed a robust learning strategy.
A Learning Strategy
To transfer the business successfully, it became clear that the company needed to persuade long-term employees to share their knowledge. The challenge was that they felt as if they were losing their jobs, and this perception had truth to it — by the time the transition finished, the life division would essentially cease to exist, and almost every current position would be eliminated.
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