It’s no secret that the economy can be unpredictable, and when business leaders can’t predict upcoming economic behavior, they strive to keep their business spending tight. Perhaps that is the reason behind the recent trend of mass layoffs, which have seen millions of American workers lose their jobs over the past several months.
You aren’t alone if you are considering laying off some employees to keep spending under control during this uncertain economic time. However, whenever you terminate a worker’s contract, you should do so as carefully and compassionately as possible — both because it can be bad for business and because it is simply the right thing to do.
Whether this is your first time conducting layoffs or you want to improve your overall management methods, here are a few things you need to know about reducing the stress and strife of the layoff process for everyone involved.
There are limits to the effectiveness of layoffs
Staff is consistently among the highest costs in business, so terminating salaries (and the workers that demand them) may seem like the most effective way to lessen your losses. Many business leaders believe this, which is why layoffs are expected business behaviors during times of economic turmoil.
However, research suggests that layoffs may not be as financially beneficial as you expect. Though your organization may experience some cost savings in the first few months after layoffs, your costs will likely increase over time. This trend may be due to reputational damage due to unfeeling mass layoffs, loss of large numbers of high-quality talent, inefficiencies in understaffed departments, aggressive poaching from competitors and more.
Therefore, before terminating any employee contracts, consider whether layoffs are the right move for your company. There are many ways to reduce staffing costs. For example, you might economize your benefits packages and offer employees perks that are just as attractive but lower in cost, like flexible working hours or remote workdays. You might also look into recruiting from the global workforce, as workers in different areas may command lower salaries.
Taking these steps before engaging in layoffs lets your staff know that you are putting them first. Then, when you do need to terminate contracts, staff are more likely to be understanding and less likely to feel resentful.
When layoffs are necessary, here’s what to do:
Sometimes, layoffs are the only or best option. When you are certain that you need to conduct layoffs to save your business, the following actions will help keep stress and anxiety levels under control.
Have a layoff policy in place. Ideally, long before you conduct layoffs, you should work with your HR management to create a layoff policy that details the steps leaders will take and the rights workers are entitled to during the layoff process. Though HR managers may work behind the scenes and may not be directly involved in terminations, they are invaluable resources for workplace policies and procedures. You should instruct HR to integrate the layoff policy into the employee handbook and make the document available to the entire workforce.
Communicate about layoffs ASAP. As soon as the word “layoffs” is uttered, rumors will begin spreading among your staff, no matter how quiet you strive to be. Instead of trying to hush up imminent layoffs, you should be transparent about your intentions. Then, you can prevent inaccurate information from gaining traction and causing harm.
Have a practical plan for redistributing responsibilities. Whether you cut one worker or thousands, your remaining staff will suffer. Before you start letting people go, you need a plan for who will take over the responsibilities of the missing workers — and perhaps how they should be compensated for the extra work.
Organize one-on-one conversations when possible. The action tends to feel less personal when you lay off many employees at once, and while that might feel better to you, it feels much, much worse to your staff. Though it will take more time and emotional investment from you, you should try to terminate contracts one by one so employees feel seen even if they are let go.
Draft a letter of termination. A letter of termination provides all the details employees need to understand their next steps, including their final day of work, how their remaining PTO will be compensated, any severance benefits they may receive and more. This letter can reduce feelings of confusion and show that you are eager to help workers understand and cope.
Offer help with the job search. Finding a new job after a layoff is not easy, as many other potential employers could also be cutting staff. If you have a robust professional development program, you might allow laid-off workers to continue to have access to help them reskill for new career options. You should also help your departing employees with their next steps by offering references, coaching services, networking opportunities and more.
Allow employees to express emotions without becoming emotional in return. Rarely will you receive a smile after you lay someone off. More likely, workers will cry, scream or swear at you, allowing emotions like fear and anger to take over. You can and should empathize with your employees, but you should try not to let your own emotions become unmanageable. By remaining calm and comforting, you should see your employees reach some sort of closure.
Layoffs are hard for everyone. If you commit to conducting layoffs with compassion, you can allow your workers and yourself to survive the experience with dignity and take the next steps toward success.
Opinions expressed by SmartBrief contributors are their own.
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