Layoffs – Considerations When Facing Those Hard Decisions - American Society of Employers - Mary E. Corrado

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Layoffs – Considerations When Facing Those Hard Decisions

As layoffs are starting to increase, HR departments face an important dilemma: What is the most effective and humane approach to letting employees go? An article in the Wall Street Journal recently outlined six key questions to consider when facing layoffs.

Thankfully, I haven’t had to conduct many layoffs in my 33 years at ASE. However, I remember many years ago facilitating a roundtable on best practices in conducting a layoff. Many of the recommendations match those in the WSJ article:

All at once or a little at a time?
Is it better to execute one comprehensive round of layoffs or opt for a series of smaller cuts? Large-scale job cuts can result in the loss of key units or personnel, while a gradual downsizing process may prolong anxiety and instability within the organization.

Face time or FaceTime?
Traditionally, delivering the unfortunate news face-to-face was considered the more compassionate approach. However, the advent of the COVID-19 pandemic has reshaped this perspective. With a growing number of employees working remotely or on hybrid schedules, Zoom or other virtual platforms might offer a more humane way to communicate layoffs. It seems counterproductive to require someone to commute to the office solely for termination purposes.

Midweek or Friday?
Once thought to be the ideal day for layoffs, Fridays provided employees with a weekend to process the news and plan their next steps. However, this perception has shifted. Many employers now view midweek announcements as more considerate. A layoff occurring on a Wednesday, for instance, allows employees time to consult with HR representatives or benefits providers during regular business hours in the subsequent days.

It's not you—it's me
A common mistake made by managers is expressing how difficult it is for them to let employees go. This approach tends to evoke negative emotions. Instead, managers should emphasize that the decision is based on business needs rather than personal factors. Transparency plays a crucial role during this period of layoffs, and managers should strive to be open and honest with employees about the organization's financial health to minimize surprise and confusion.

Multiple months of pay, or less?
Determining the appropriate exit packages is another critical consideration. While corporate advisers suggest providing at least one month of severance pay, many employers are offering more substantial packages. Salesforce, for example, granted nearly five months' pay, health insurance, and other benefits to its U.S. employees during recent layoffs. It is advisable for companies to be as generous as possible with exit packages and develop policies that can withstand scrutiny, considering the ease with which employees can share their experiences online. One common standard is one week per year of service. This might not be enough though if the employee doesn’t have significant tenure.

Who goes?
Identifying which employees should be let go is often one of the most challenging aspects of downsizing. The process can be lengthy, involving discussions among department heads and managers to determine the most suitable candidates for layoff. While seniority used to guide these decisions, companies now place greater emphasis on skills and recent performance. Be sure to think long-term…what will it cost you to replace this position down the road?

Layoffs are stressful for everyone. Careful planning is crucial to ensuring a smooth process with minimal disruption.  It’s also important to consider the well-being of the employees remaining.  Honesty and transparency is important to maintaining a psychologically safe workplace.

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