Tips for Compassionate Layoffs
Compassionate Layoffs Are Done With Empathy and Care
Are you interested in best practice tips for how to do layoffs with compassion, empathy, and class? A reader asked these questions about how to do employee layoffs.
Are there any standards for a company facing a work slowdown? Last hired / first to go? Also any protocol relative to the timing such as Friday versus any other day of the week? End of pay period? Two weeks' severance? What do you recommend for company layoffs?
Layoffs are never easy and they always create uncertainty and fear in the workplace. But, you can do layoffs in such a way that you win in the court of public opinion. You can do employee layoffs so that the employees who remain are encouraged by your effective, caring handling of the necessary layoffs.
You also want the employees you are laying off to feel as if they were well-served. An employer of choice is cognizant of the needs of all stakeholders—and does their best to meet them.
7 Tips for Layoffs
Your efforts to avoid layoffs are unsuccessful. Use these tips to limit the damage that layoffs can potentially cause in your organization.
- First, give your employees information about the business problems and provide some sense that layoffs may be necessary as soon as you think they may be necessary. This will increase the trust of the remaining employees. An employer of choice may not always be able to avoid layoffs. But, they always regard the feelings and fears of employees with demonstrated respect and early information.
Before you do layoffs, consider all of the other options that an employer has to save money and produce efficiently. Your employees will appreciate your efforts, even if they are unsuccessful.
You do need to communicate what you are considering and implementing, however, or employees will never know that you thoughtfully pursued other options before settling on layoffs as the appropriate alternative.
You can consider these eight major alternatives before doing layoffs. Companies have asked all employees to take an unpaid day every two weeks, eliminated part-time and temporary staff, and reduced salary by 5 percent.
Be creative; layoffs may not be your only answer. But, as you consider alternatives, talk to your key employees. You don't want a mass exodus of your best people who see better prospects elsewhere.
- Speak with a qualified employment law attorney with experience in layoffs. I've only been in a position to have to do layoffs once, so I started the process by speaking to an attorney to make sure that the company actions were legal, ethical, and compassionate. It was a learning experience for me and recommended for anyone who is dealing with layoffs for the first time.
- Non-discriminatory practices are a must in layoffs, so who you lay off must be painstakingly determined. Who you lay off depends on the practices your company has used before and on a variety of legal and ethical guidelines. When I did layoffs, I eliminated a complete department and then the managers decided whom they could most easily afford to lose based on the employee's job description.
I had to be careful that I was not discriminating against any protected classification of employees and that we applied the criteria for layoff selection equally across all departments.
Some companies do use last hired / first to go criteria. I don't recommend it. You are cutting out all of your experienced recent hires or your young, diverse talent. I recommend that you make a business case for each layoff
Some companies eliminate shifts. Other companies eliminate a position, such as all clerical employees, and shift the work to the managers and staff. I have even heard of companies that tell each department they must downsize by 10 percent. Although superficially fair, this is bad for the business because you may be eliminating essential positions
- If layoffs are necessary, you should do layoffs as close to the beginning of a week as possible so people can immediately apply for unemployment and start their job search. The last thing you want is to create a situation in which people are mourning their jobs, fretting over their future, and becoming angry over a weekend when action possibilities are limited.
(Rethinking this earlier recommendation. With the abundance of resources that are available online now, no employee will be unable to start a job search even on the weekend. In almost every state, they can also apply for unemployment online.)
- Do layoffs as soon as the business need makes them necessary. Layoffs are not a time to punt; preparation will make layoffs less painful for all. Chances are that if your firm is experiencing problems, employees are aware and worrying anyway. So, make the decision and do the necessary layoffs.
When you determine the need for layoffs, do the best you can afford for the soon-to-be former employees. A healthy severance package, potential outplacement services, and other economic assistance can make layoffs more manageable for employees.
Before you do layoffs, have your severance package ready and write a legal document that releases the employer from liability for the employee to sign in return for the severance. Laws regarding releases of claims differ from state to state so you need to check with your state department of labor and attorney. (The employee generally has a certain number of days to respond to your offer and a certain number of days during which the employee can change his or her mind about signing the release of claims.)
When you consider severance pay, you'll want to devise a formula that provides one to two weeks of pay for each year that the employee has worked for you. You can also consider providing employment assistance or outplacement services. The more generous your severance package, the more likely the employee is to accept it and sign the release from liability.
Depending on your business, and the number of layoffs you are contemplating, the WARN Act provides legal guidance about when employees must be notified of upcoming layoffs.
Remember that your employees and former employees may not remember why you were forced to do layoffs but they will remember how they were treated. Treat people with dignity. Do the layoffs individually with Human Resources and the employee's manager present. Complete the process on the same day. Do not even consider a mass meeting, telephone conference call, or an email to lay people off. They deserve more than that from you.
More About How Employers Do Layoffs
Disclaimer: Please note that the information provided, while authoritative, is not guaranteed for accuracy and legality. The site is read by a world-wide audience and employment laws and regulations vary from state to state and country to country. Please seek legal assistance, or assistance from State, Federal, or International governmental resources, to make certain your legal interpretation and decisions are correct for your location. This information is for guidance, ideas, and assistance.