Laying off employees is often a necessary evil in the business world. Regardless of the size of the business or the reason for the layoff, the process is usually unpleasant for both parties involved. However, there are some methods and pointers that can make the transition smoother and less stressful for everyone.
Planning and Organization
A common reason for laying off employees is downsizing, which causes a company to reduce its workforce to improve its financial performance. It is important to think carefully about who will remain and be able to maintain the work of those who are being laid off. Once you decide which positions will be eliminated, your next step should be to create a game plan. It is beneficial to plan who will be involved in the layoffs and what you need to communicate; such as why the company is downsizing and what resources and support will be offered. Plan out the meeting to help you avoid potential legal liability, as well as overlooking any important details.
While planning how you will explain the situation to the employee think about how you can remain professional but still provide empathy and compassion. It is important to be as honest as possible and respectful to the employee. Another way to show compassion is to make sure you deliver the news in person. Although it may be uncomfortable, you will be able to have a conversation, answer questions, and help your employee make a transition plan.
Delivering the News
Always notify your employees of the layoff in a calm, private setting and don’t wait until the last minute. This shows that you respect the employee’s privacy and time and avoid some extreme emotional reactions. It’s important to get to the point. Don’t start your conversation with comments about the weather or ask about family. No amount of small talk is going to lessen the news. This will do the opposite by making the termination more unexpected. After delivering the notice to the employee give them time to process and don’t ramble on or over-explain.
Oftentimes laying off employees is caused by financial reasons rather than poor employee performance. This causes employees to question why they are being let go. Before the meeting try to imagine how a person will react and practice your responses to different emotions and questions. Don’t answer with clichés such as “look on the bright side”. This makes the employee feel like you don’t care about their feelings. Also, don’t give reasons why that specific employee is being laid off, while another coworker is retained, as this could lead to legal issues.
After the employee is finished asking questions it’s a good time to go over a severance package, if your company has one, and any additional resources you may be able to offer.
• Severance pay
o Severance pay usually amounts to a week or two of pay for each year of employment. This helps make the transition period a little easier and more positive for your employees.
o Include information on COBRA and what the employee needs to continue receiving benefits.
o You may want to include information and contacts for the local unemployment agency to assist the employee while they search for a new job. Additionally, include information on how to file for unemployment and apply for your state’s unemployment benefits. State unemployment can usually take time to process, so it is important for employees to file as soon as possible.
• Letter of recommendation
o Something as simple as offering to provide a letter of recommendation can make the transition more positive and leave room for future opportunities with the employee.
o A beneficial service to both parties is third-party outplacement. Employers can use outplacement effectively to help employees bridge the gap between unemployment and a new job. Employees impacted by the layoffs can get assistance with things like resume writing, job search assistance, and career transition counseling.
Avoid Consequences and Generate Goodwill
A combination of the above steps will help to avoid any negative consequences from the layoff. A badly delivered layoff can easily lead to weakened business relationships, reduced trust among the remaining workforce, and angry former employees who can tarnish your reputation. With the ease of social media, a nasty review can lead to lasting harm to your business. Whereas a well planned and executed layoff can position your company for future growth and greener pastures. If you’re faced with the difficult task of laying off employees, let them know not to lose hope. There are resources and tools available to get them back on their feet.