The Right Way to Handle Layoffs
Layoffs are a complex termination. Those being laid off are still subject to the emotional stress of any termination such as firing, and those who keep their jobs could suffer from low morale. This article is about how to properly manage all stakeholders in a layoff.
Termination is Still Termination
It is often difficult to let someone go. Whether or not they are being laid off or fired has no effect on the stressful nature of the situation when being presented with a termination notice. Layoffs however present a different set of circumstances than firings because they typically involve more people. Also, the reason is typically not the fit of the employee to the company, but rather, it is economic pressure or restructuring. In addition to those circumstances, the manager still has a surviving workforce that will have certain expectations to manage.
Most employees already have a sense when the company is in trouble. They have already been asked to cut costs in their departments while to doing everything they can to generate more revenue. Perks like holiday parties and seminars are cut. There is a hiring freeze put in place and furloughs. When the mounting pressure builds to this point, it is time to call departments together and clearly explain the challenges and the plan to turn things around.
Following this meeting the word “company” should no longer be used to describe the situation. It is no longer “company” it is “we”. It is for everyone to accept the situation, and mobilization is critical. This is when managers should incorporate their reports into the turnaround process. Maybe layoffs could even be avoided, but nonetheless, being preemptively transparent makes everyone feel involved and valued and that their contributions matter. Should the time come to announce layoffs, it should come with regret, but to no surprise.
When you sit down to deliver the bad news the individual, it might seem like best place to begin is to blame the economy. But those getting laid off will see past this tactic because unless the whole department is going, they are still going to question their own self-worth and value. Layoffs are like a manager asking “who would I fire if I had to fire someone?” This is how the employee is most likely going to see it, least valuable player, and thus feel deflated.
To address the emotional factors of the person being laid off, focus on their needs. Be very general as to how you made your selection. Show empathy and segue into what you intend to do assist the employee during their transition. Offer to provide access to your network if you're able, and guide them to resources for government financial and job search assistance. Promise, and deliver on the promise, to follow up as a reference as quickly as possible when called upon. Lastly, provide the notice in accordance with local laws. If you must notify employees at least two weeks prior to their termination date then adhere to that measure as the minimum standard.
In terms of other local laws and other termination related matters, contact your human resources advisor, attorney, or local Small Business Administration.
Those who were able to remain employed also face challenges. Aside from a likely increased workload, there could also be feelings of guilt or even distrust of the organization. Morale is jeopardized during layoffs and it is the manager’s duty to address the risks.
Empathize with the remaining team. Communicate that you understand their position by letting them know that you aware that they have more work and their co-workers, perhaps close friends, are gone. Second, you must gain credibility by offering yourself to assist wherever possible. To facilitate this promise you are going to need to be accessible and highly communicative. Your interaction with your reports, as you lead them through an uncertain and stressful time might seem daunting, but the long-term effects of poor morale could be far worse.
On the Bright Side
Some employees will take a positive approach. Some will find creative ways to increase productivity to show how well they contribute. Others will look for new opportunities and try new tasks for their own development. Always encourage your reports to be positive. Reward positivity with positivity as you see fit for your organization. The future leaders will stand out.