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Handling Layoffs Right

16 Dec 2022

Layoffs are becoming more frequent across all sectors of the economy. Find out how managers can make them as smooth and painless as possible.

It was only a few months back when the Great Resignation was the phrase on everyone’s lips. Just this summer all the cards seemed to be in the hands of employees, with managers adapting their HR practices and pay packages to keep not just the best and brightest, but pretty much anyone. 

Oh, how things change… Sure, while the Great Resignation is not yet a spent force, a new phrase is increasingly being uttered by journalists and economists – the Great Layoff

Twitter may dominate headlines due to the company’s new and colorful management, make no mistake – the process has been underway for months now.

A quick glance at the relevant articles may cool some employees’ nerves. After all, the brunt of the pain seems to have been borne by techies and bankers. While that might be the case now, the broader political and economic trends signal that a recession and increasing levels of unemployment are just around the corner. Sure bankers and techies may be the first dominoes to fall, but many other sectors will follow.

We’ve written loads of blog posts covering the employee perspective, but all levels of management will have to make some grim decisions these next few months. 

This blog post will provide tips to managers explaining how to handle layoffs during these tumultuous times in a way that leaves all the involved parties – the laid off, the remaining employees, and the managers – in the best way possible.

Why Pay Attention To Layoffs?

Before we jump into ways how you can improve your layoff practices, it is important to understand the importance of paying attention to these things. After all, the person is leaving – who cares? Well, quite a few people actually.

First, if you lay someone off swiftly, unexpectedly, and without much explanation, this may not create the best climate in the workplace among the remaining colleagues. Heightened job insecurity, potentially increased workloads (to compensate for the lost employee), or simply seeing a friend sacked, may sap productivity and motivation of those who are left behind.

Second (and expanding on the first point), if layoffs are handled poorly, those remaining may lose confidence and trust in the company. They may even want to leave the company with such shady HR practices. A 2008 study shows that downsizing by 1% was linked to a 31% increase in voluntary turnover the next year.

Finally, sacking employees without much regard simply doesn’t look great. While just a few decades back few would have even noticed a wave of layoffs, these days everyone has a platform to share their experience. If companies treat their departing employees poorly, they can be sure that it will backfire in bad publicity. In the era when marketing is king, these things shouldn’t be taken lightly.

Getting Managers Ready

Firing people is not a difficult thing if you don’t mind risking the aforementioned negative consequences. There are three things to keep in mind if a company wants its managers’ layoff game strong.

Have a standardized layoff process

One thing that really helps is to have a set of guidelines, principles, and practices when it comes to downsizing that are universal across the organization. A single, standardized approach will help HR equip managers with skills they will need to successfully get the unpleasant job done, without much impact on the company as a whole. 

Get training

It’s one thing having the guidelines written down on paper for everyone to memorize. It’s a whole different thing for managers to genuinely understand these principles. Therefore an emphasis on training should be of utmost importance. Whether this is in-house, HR handled training or an external trainer hired for this explicit purpose, companies should not spare money in not just getting their managers ready, but refreshing their knowledge regularly.

Avoid one-on-one

Laying people off is a thankless task that is neither easy, nor pleasant. Unless a manager was born to do this, things are likely to sidetrack or risk getting confrontative no matter how well managers are prepared.

To avoid this, never have your managers go at it alone. An HR colleague is a logical addition to any downsizing squad as they have been trained in literally managing human resources. A representative from an outplacement firm is also a great idea. They will help ease the transition for those fired and take some of the emotional burden off the managers’ shoulders.

Three Golden Rules Of A Dignified Layoff

Be fair and honest

An employee who has worked with the company for years if not decades deserves a fair and honest explanation on why they are being cut. Explain this downsizing decision as clearly and honestly as possible not just because telling the truth is morally right, but because it may help the employee going forward.

For example, if someone is fired because their performance didn’t live up to the company standards, explain how that conclusion was made. Or if the employee routinely flouted company rules on disclosure or conduct, there is no reason to hide these things. The reason for transparency is that it may help employees change or improve the things the market has deemed that they lack, allowing them to reenter the job market and be more competitive.

Be compassionate

This part is very tricky as you have to manage the right level of compassion without letting the employee take over the agenda. Managers should offer support and sympathy, but also not indulge in it all too much. 

This whole process will impact the employee’s ego, so try to offer a ray of light. Express gratitude for the work and maybe even praise them for some past accomplishments. If you can, offer support going forward such as providing a reference or introducing them to your contacts.

Finally, managers should never express their compassion by adding how difficult this decision was for them. It’s absolutely irrelevant as the employee does not really care about anyone else’s feelings at that point. 

Be quick

A swift dismissal is better than a prolonged tear fest. Of course, you should keep the honesty, fairness, and compassion principles in mind, but not letting the whole lay off process drag on endlessly is better for you and the employee involved.

All of the aforementioned steps take a lot of study and practice, as well as a great deal of character to handle graciously. No one was born an expert at this, that’s why preparation beforehand is important.

Handling The Aftermath

As we discussed before, handling layoffs well is important not just for those being laid off, but also for those remaining. Alas, many managers think that after the cuts have been made, they can wipe off the sweat and continue as normal. Far from it! There are still bases to cover.

Assure those remaining

If managers don’t want insecurity, fear, lack of motivation, or even resentment brewing among those who survive the cull, they should have an honest talk with the remaining employees to explain the reasons for the sack and reassure them that there is no need to start looking for a new job.

Companies should do their best to avoid layoffs becoming too regular. A study from 2003 shows that the more employees are exposed to layoffs over a limited period of time, the greater their feeling of job insecurity and desire to quit. That’s why no matter how big the cuts, employees should be reassured that no further cuts are planned.

Manage workloads

As good capitalists, most CEOs may think it a brilliant idea to cut the workforce and ask the survivors to do more. This is OK, if the company has acquired some fancy tech that boosts an individual’s productivity without adding to the strain and hours. 

Mostly, however, bosses simply want the remaining employees to do more with less. This is not a great strategy, particularly if combined with the fear that may stem from lack of clarity. Even if some temporary work increase may be required, managers should be sensitive about assigning this work. Ideally they should offer some ways of compensating those employees who are left picking up the pieces.

Author: Lote Steina

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Life doesen't have a do-over.
Commit to it! BePrime!
Life doesen't have a do-over.
Commit to it! BePrime!