The road leading up to a company’s decision to layoff any number of their employees is long and winding. The process of actually laying someone off should also be a long well planned decision that is executed with the care and concern it deserves. A Reduction in Force does not begin and end at the announcement to your employees. Many companies are anxious to get the difficult and sometimes painful process over with, however, this rip off the bandaid approach neglects a whole host of very important steps.
Following are five common mistakes companies may make during a layoff:
- Poor Planning – The execution of a layoff should be orchestrated with precision and impeccable timing. Your planning should begin well in advance of making a formal announcement. That planning should include having everything in place for your employees to move forward. This includes not just information on unemployment and COBRA, but thoughtful packets of information on your EAP, other opportunities in your company, and FAQs that will help answer their questions.
Long term planning also allows you to ensure that you are complying with State and Federal laws, such as The Worker Adjustment and Retraining Notification Act (WARN). Under WARN, you may need to file information with your state and local government offices and it may dictate the length of notice you will have to give your employees. Additionally, when you plan in advance, you have the opportunity to produce and analyze a Disparate Impact report for the employees being let go, thus reducing your legal risk
- Not Communicating Internally – Ensuring that everyone involved with the decision is on the same page is critical. This means that everyone who may need to be involved is on the planning team and that the planning team is meeting regularly. This is especially important if you are laying off people in multiple or remote locations. Your team should have an exact agreed upon time to deliver the message and you should host follow-up calls or meetings to make sure everyone involved has a clear picture of the entire situation.
Companies that do not communicate internally run the very real risk of not only having information leaking before it should, but having team members going ‘rogue’. A rogue team member during a layoff is a manager that is making their own rules, instead of following the guide that you have provided. They are treating people differently than the rest of the organization, they are opening you up to a lawsuit. Having regular (daily or twice daily) planning team calls or meetings the days leading up and the days post the announcement, will ensure everyone is on the same page with the same information.
- Not Having the Right People Deliver the Message – It is critical that the leadership of the organization act as one cohesive unit during a layoff. It is important that the employees see that Operations and Human Resources are in lock step on this decision and that it is not negotiable. When the news is presented, both a member of Upper Management and Human Resources should be presenting the information. This shows the employee that everyone is in agreement and believes that this is a necessary decision.
I recently heard from a colleague about a multi unit retail company that is strongly advising their multi unit managers NOT to visit employees who have been laid off and are currently working their notice period. The company believes that the employees will be upset and the managers should not have to engage with them. This thinking is the exact opposite of what should be happening. The managers should be visiting the stores to show this was an organizational decision and that they support their employees through the transition. Ignoring employees creates anger and confusion, the two worst emotions you could have in an employee. Anger and confusion lead to negative reviews on sites like Glassdoor and worse, lawsuits.
- Not Training Managers on What to Say and How to Say it – Not only is it important that everyone follow the same script when delivering your message, it is also critical that they understand HOW to deliver the message. Teaching your managers empathy and compassion will SIGNIFICANTLY reduce your risk and SIGNIFICANTLY increase morale. While there is no amount of training that will make an employee happy to be laid off, there are certainly multiple methods of making employees’ feel supported and taken care of.
In a recent survey we completed, we found that 82% of employees consider a company taking the time to train managers on how to have difficult conversations empathetic. We also found that only 21% of those laid off stated that their layoff was handled with empathy. Of the 79% who stated they were not laid off with empathy, 54% are considering a lawsuit! Training your managers in how to treat your employees with empathy is critical.
- Not Worrying about the Repercussions to the Rest of the Organization – This is perhaps the most common mistake that companies make during a layoff. Even companies who are focused on providing an easy transition for exiting employees may forget those that remain. Ensuring that the rest of your organization feels confident in this business decision is critical. Just like the people who are exiting, they must understand what has happened, and just as importantly, WHY it happened.
When you are able to provide a sense of security to those who remain, as well as help them feel better about what happened to their colleagues, you will gain loyalty and trust. Engagement and commitment will actually increase. However, if you neglect to explain the WHY to your organization, neglect to provide informational packets, neglect to share the success stories of job fairs and placements (or perhaps just neglect to take care of those transitioning), instead of engagement and commitment, you will receive resentment and high turnover. And instead of seeing a positive change in your business because of the difficult decision to let people go, you will see a steady decline that will be increasingly difficult to turn around.