On Labor Day -- Thoughts About Layoffs

In my HR/Legal career I’ve been involved in more restructures, reorganizations, right-sizings and reductions-in-force than I like to remember (46 the last time I counted). They are disruptive and often disheartening, but there are ways to make them slightly less painful. Minimizing the impact on employees, both those who stay and those who go, should be your mantra.

Specifically:

1) Cut staff last. Look at cutting independent contractors, outsourced services, travel, entertainment and even education costs first. Let employees know you looked for savings everywhere you could think of before starting to look at eliminating roles.

2) Tell the truth. Meet with managers to discuss all the reasons staff cuts are necessary. Distill those reasons into a concise, cogent explanation (one you may need for required paperwork under the Older Worker’s Benefits Protection Act, as well). Share that explanation with managers to repeat in script form in all the conversations they have with employees. Repeat that message in all your group communications. In other words, find your page and stay on it, to keep speculation at a minimum and trust at the fore.

3) Be generous. Business necessities will play a part in what’s possible financially, of course. Based on those constraints, add as many days of notice as you can, bearing in mind that no one is comfortable hanging around too long or endlessly training replacements. Make the last day the first of the month if your insurance benefits run for an entire month. Round severance eligibility up to the nearest year for those at who have at least 1/2 a year at the company under their belt. Provide a transition allowance for those who have a company car. If staff have old computers that you own or old printers, etc., let them keep them once they are scrubbed by IT. Offer outplacement. Packages are available at various price levels, and they can provide résumé writing assistance, interview prep and networking ideas.

4) Be flexible. Offer employees continued insurance benefits under COBRA or the cash equivalent of the coverage. With cash, even after taxes, under the Affordable Care Act, they may be able to obtain benefits for a longer period of time. Let employees choose outplacement or its value in cash. Let employees come in later or take longer lunches during their notice period if they need the time for job interviews.

5) Be mindful of soft impacts. Alert your Employee Assistance Program and remind employees, those going and those staying, of the resources offered. These may include stress-reduction techniques, financial advice, even an onsite counselor for a bit. Offer transition counseling for insured employees near Medicare age -- a pre-paid consultation package is usually modest in price.  

6) Support managers. They need to deliver departure messages as gracefully as possible and to reassure the rest of the staff without oversharing. Provide them scripts and remind them — it’s not about you. Saying what might make you feel better is not the point. Aim for matter-of-fact delivery of accurate information. Adding personal or emotional messages of regret, anger, bewilderment, even thanks, just compounds employees’ unease. Having to decode your words and feelings adds to their emotional labor.

In short: be straightforward, respectful, transparent. The process will still suck— but hopefully a bit less.