The economic recovery and job growth has been slow but steady. But despite the growth in some job areas, downsizing continues to affect many US businesses. For anyone who has ever gone through a merger and/or downsizing, they can understand the high levels of stress that affects all employees. Employees who are let go experience the trauma of an unexpected job transition, while the employees who remain live in constant fear that they will be next on the chopping block.
While corporate layoffs are never easy or fun to manage, mergers and downsizing has become a part of corporate America. It has affected literally every type of organization both for-profit and non-profit.
Layoffs ultimately occur because of a business decision to reduce costs. Since most costs associated with any business is in the area of salary and benefits, reducing the number of employees is a quick way to reduce fixed overhead costs.
Layoffs can be triggered by any number of things: a merger, technology changes, business model changes, industry changes or economic downturn. Regardless of what triggers layoffs, the effect on employees can be difficult.
Managing the layoff process is critical to ensuring a successful transition for all involved. Having a strategy and plan can help minimize the negative impact on employees, former employees and public perception of the organization.
6 Tips to Help Manage Layoffs
1. Do the Right Thing
Organizations should exhaust all other cost cutting avenues before making a decision to layoff employees. Other cost cutting measures could be identified in the areas of attrition, early retirement, management cost control, process improvement and performance management tactics. All of these measures should be looked at to see if significant costs can be identified and reduced.
2. Identify the Layoff List
Once the decision is made to reduce the workforce, identifying who gets laid off can be a daunting task. When determining who will be let go, make sure there is an unbiased group who reviews possible candidates and uses objective data to make the determination. A strong performance management system can be an objective way to identify who should be put on the layoff list.
3. Consider the Law
When identifying who will be put on the layoff list, make sure all legal considerations are taken into account. There should be no discriminatory decisions made and all decisions should be made objectively. Make sure there is supporting documentation for all decisions.
4. Communication Plan
It is important to come up with a strategic communication plan that identifies the stakeholders and who needs to be informed of the layoffs. The plan should then be put into a timeline that communicates in the order of personal impact. As an example, an employee would be communicated with before the employee’s coworkers are informed of the layoff. Being sensitive to what is communicated and the timing of the communication is critical in minimizing the personal impact it has on all employees.
5. Offer Transitional Help
Develop a generous transitional plan for those being let go. This should include a severance package which can include extended health benefits, outplacement services and pay for an extended period of time. A good severance package can ease the burden and help make a positive transition for laid off employees.
6. Pay Attention to Those who Remain
Don’t pay so much attention to the ones that are let go that the employees who remain are forgotten about. Make sure there is continuous, factual communication to employees who remain. Honesty is always the best policy. Engage the remaining employees in helping to identify ways to reduce costs in other areas of the organization. Share vision about the future and offer hope when possible.
Finally, layoffs and downsizing is the last thing any business wishes to partake in. Being sensitive to the timing and communication can greatly impact how the layoffs are perceived by employees and the general public.
photo by: PaDumBumTsh
