Ideally Leading Employee Layoffs

Steve Lovig, Director of Human Resources, Homestar Financial

It’s vital that you demonstrate compassion during a layoff.

When an employee is losing their job because of an organizational change, and not because of their own performance, it can be traumatic for all of the ‘humans’ involved.

In Sept 2022, HRForecast.com published an article which said: “Downsizing concentrates on reducing workforce to save money on payroll and other HR expenses, while the goal of rightsizing is to maintain the right number of human resources. In terms of rightsizing initiatives, companies may initiate staffing cuts as well.” The article sounds like there is little to no difference between downsizing and rightsizing. They both result in good people losing jobs because of a company’s decision.

Whether you call it rightsizing, layoff, staff reductions, or downsizing, whenever an employee’s job is ripped away, that is the time for you to step up and lead with your heart. This can impact your company’s brand in a positive way.

Many organizations in the U.S. are closely looking at ways to reduce costs, including possibly cutting staff. Whether you are human resources professional or any other leader of an organization, the way you speak with every one of those employees matters. Both the individuals losing their jobs, and the individuals left behind are paying close attention, and that’s where you can positively impact your company’s brand in a layoff.

Human resources leadership must provide specific ‘talking points’ to be used when speaking to the laid-off individuals. The manager dealing with impacted employees, the HR Professional who work side-by-side with the manager in delivering the message, the CEO addressing the entire organization at the end of the re-structuring, and each Manager of every department where no employees were laid-off, need to use explicitly developed language when speaking to employees. Because, they are all watching what you say, and how you say it.

TREAT THEM WITH DIGNITY AND RESPECT

The right communication will help ensure that you have treated all employees with dignity and respect. Communicating openly and honestly with both the impacted employees and those who were not part of the staff reduction is vital. The latter will often have to pick up additional responsibilities and will frequently feel “Survivor's Guilt.”

TALKING DIRECTLY WITH THE EMPLOYEE

In most situations, an employee is suspecting they’ll be included in a layoff. But even so, it is important to give them a background on the decision. For instance, leaders can use these talking points.

1. Based on benchmarking with others in our industry, looking at past performance and doing our best to forecast numbers for this and the next several years, we have determined lower staffing levels are needed across the company, which will result in some job loss.

2. In an effort to reduce costs, we are restructuring in some Sectors/Departments/Regions, and that is resulting in the elimination of a few roles.

Leaders should try not to spend too much time there but tell them directly with a compassionate tone, as the employee can already be worried. A few examples to this are:

3. Thank you for your dedication to helping the organization. Your efforts were not in vain.

4. Unfortunately, your position has been determined to be one of those impacted, and we’re ending your employment with the company. Today will be your last day of work with us.

After this, the leaders can continue to move the process along by allowing the employee to ask questions, but don’t allow it to drag out. The human resources professional can step in if the manager struggles and the manager can step away after allowing a couple of questions.

The HR professional can step up to handle the rest of the conversation. It is crucial to ensure that no one has these conversations alone. Managers need to partner with a trained HR Professional to say things like “I recognize this may be upsetting, and you may have some questions. Our Human Resources Professional is here to help the questions you have.”

CONTINUE SPEAKING WITH THE (NOW) FORMER EMPLOYEE

As the Manager finishes their portion, the HR Professional can explain the next steps. For instance, tell the employee that you are sharing a lot of information with them and realize they could miss some so that you will be sending all of the details to their personal email as well.

In addition, follow this structure, especially if you provide a separation agreement.

Final Pay.

i. Explain final pay date, including paid time-off, and other paid benefits

b) Health Care Coverage and Benefit Premiums (if applicable)

i. Details about how their group healthcare coverage will be handled, including provisions of COBRA.

ii. Explain what will happen to their 401(k) or other retirement plans, along with contact information.

c) Separation Payment (if applicable).

i.Sending an agreement in a follow up email for employee’s review. (Remember that employees over 40 have specific requirements that other employees don’t have.)

d) Equipment Returns (if applicable).

i. All equipment provided by the company should be returned within five (5) days from today. (Ask the person if they ‘see any reason why they wouldn’t be able to get the equipment back on time’)

ii. Discuss ways for them to return equipment; drop-off at company site or provide a FedEx account and nearby locations, where the company pays all the charges.

e) Confirm Personal Information.

i.Ensure accurate contact information for the exiting employee is on file.

ii.Confirm personal phone number, personal email, and current residential address.

f) Email Separation Packet.

HR Professional will email details reviewed, including separation info, and valuable resources (if applicable).

i. Information about employee assistance plan, including a variety of counseling options and online resources to help with daily life.

ii. Department of Labor’s resources like unemployment benefits and re-employment resources.

LEADING WITH YOUR HEART

Provide Career Resources.

This is a very crucial step where the HR Professionals have to make themselves available to provide career coaching to former employees. The process includes:

a)Resume building, interviewing skills, and developing a LinkedIn profile, as well as names and contacts of companies typically hiring for specific skills.

b) Ensuring that former employee knows where and how to file for Unemployment (provided that this “Per State;” requirements vary from State-to-State).

c) Include details about upcoming career fairs and names/contacts for employment agencies and recruitment firms.

d) Ask your HR Professionals to connect with organizations similar to yours, who might have hiring needs, instead of encouraging your former employees to contact them. HR can give other companies details about your former employees. In some cases HR can write a LinkedIn post, describing the type of skills those laid-off individuals have, and inviting anyone who might need those skill sets to contact them directly.

e) Because losing a job can be both an emotional time, and a financially difficult time, providing credit and budgeting tips can be really helpful.

TALK DIRECTLY WITH THE REMAINING EMPLOYEES

Once the lay-off conversations have been completed, it is time to communicate the company’s message with the remaining employees.

It has been proven that it is best to bring a group closure following a staff reduction as it gives employees a chance to express their concerns publicly and hear what occurred directly from their manager. This not only minimizes concern relating to the employees’ own job security but also diminishes the rumor mill.

If the company’s goal is to treat current and former employees with dignity and respect, providing an all-department meeting is vital. Here are some sample talking points:

o I called all of us into a meeting to follow-up regarding the staff reductions that took place earlier today.

o As you may know, some members of our ( particular departments/regions) have been let go today.

o None of your roles are impacted, unless there is an unexpected change to our business.

o The company has offered the impacted individuals a separation package, including paid medical, dental and vision coverage (if applicable), and is working with them to help them move forward with their careers.

o Following these difficult decisions, we believe each department/region is staffed correctly for future production. No delays or problems are expected, but certainly, if any occur; tell me about them, so I can help with a resolution.

In addition to the tips, here are some frequently asked questions with answers

How many employees were let go today?

“I don’t know the exact number; I can tell you it was many, and you may know some of them personally. This is a difficult time for those individuals, and for all of us. What I really need you to focus on is yourself and your role, so we can move forward as a team.”

Who’s going to do all the work that the employee did?

“With the elimination of any position, other members of the department/region will have to take on the duties. That’s something we’ll have to deal with in this new size.” Or “Your Leadership Team believes we are staffed effectively and will be able to meet planned production levels.”

What should I say if someone asks me for a reference?

“Contact the HR professional. They will ensure calls are responded to, along with the company’s policy of giving hire date, term date, and title of last position held.”

What if I get a call from other employees, like maybe a former employee?

“Refer them to your Human Resources Team.”

o “Employees should not become engaged with others outside the company (including anyone who was recently let go) about staffing reductions.”

o “Forward calls or questions from the other person to the HR team, who can ensure the calls are handled appropriately.”

What if I get a call from someone saying they’re with the media?

“Refer them to our Manager of Marketing (or other appropriate department).”

It is important to remember that how the company treats people during lay off will impact its brand. Leading with heart and the dealing the layoff process positively is important.