How to Lay Off Employees with Dignity

Layoffs Should be a Last Resort

Layoffs Should be a Last Resort

The current economic climate is taking its toll on businesses, and by extension, on workers and their families. Stress levels are high, from top-level management to entry-level workers. Employees who manage to keep their jobs might have a spouse who has lost theirs, or they’re experience the loss of contact with laid off co-workers. Some even feel remorse or guilt for keeping their job.  

There is no doubt that morale and productivity are greatly affected by seemingly unending layoffs. 58% of respondents to a recent survey by i4cp (Institute For Corporate Productivity), indicated they reduced their workforce in 2008, and almost 40% planned a reduction in 2009.  Even companies who don’t necessarily need to reduce their workforces are deciding this is a good time to let people go or restructure their organizations. It is vital that management handle the process effectively to avoid a corresponding productivity decline by remaining employees.

Layoffs should be a last resort. If your problem is too little profit, consider asking employees for help in cutting expenses or brainstorming ways to increase sales. Losing the experience and knowledge of your employees is difficult to overcome. Your company will not be well-positioned for future growth if your first reaction is to cut staff. 

If your problem is too many employees, then layoffs are more difficult to avoid. Here are some Layoff Dos and Don’ts:

Do not implement layoffs without a strategy: first, know what your post-layoff company looks like, including its structure and the staffing levels that will be needed in each department; then, decide exactly when the layoff will occur, how much severance will be paid to each employee, and how far the company will go to assist laid off workers.

Do avoid legal issues: base decisions on the needs of the business, not on head count or seniority. Avoid accusations of discrimination based on age, gender or race.

Do give as much notice as possible: there is no evidence that more notice of a layoff will make workers unproductive or increase chances of harm to the business. On the contrary, too little notice leads to mistrust and feelings of disrespect. Employees have the right to plan their lives, and employers should give them the opportunity to do so.

Do not treat employees like children: Remember you are being watched! Keeping secrets and “trying to act normal” fuels the rumor mill. Be open, dignified and efficient when conducting layoffs. 

Do over-communicate: rather than withholding information, clarify the why, when, and   how.

Do not behave as though nothing happened: employees will talk whether or not management chooses to participate in the discussion. By discounting the layoffs, employers contribute to employees’ feelings of helplessness, and make them wonder what else is being hidden from them.

Do encourage employees to talk about it: honest, open communication speeds recovery and can strengthen ties between surviving employees and management.

Do give employees something to look forward to: share the company’s vision with your remaining employees; focus on what you can achieve in the future, not what you’ve lost.


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