Thousands of companies have instituted layoffs, which generally means a hiring freeze, too. Businesses with steady work levels are fortunate in this economy; but if they have already cut back staff levels, they can expect overworked and stressed-out employees. For companies in this position, it’s probably not the best time for restructuring.

But for businesses experiencing work slowdowns, a hiring freeze is a good time to re-evaluate staffing needs.

In business, proper planning means success.
Plan for the post-freeze work increase now, and you’ll be better positioned when the economy begins its recovery. First, take a look at each department under your supervision. Observe the team’s workload and how it all flows. Are they able to get their work accomplished each day, or are they perpetually behind?  Are they looking for more work to do, or—even worse—extending each task out to take up their available time?

Eliminate time-wasters.
Review all the individual responsibilities required of your staff.  Is each one essential to getting your company’s products into your customers’ hands? Or, are your workers required to fill out unnecessary paperwork or perform redundant tasks at the expense of producing sales? Consider putting a freeze on all non-essential tasks until the hiring freeze is over. 

Poll your employees. 
Engage staff in dialogue and you can learn exactly what they think of their workload. Ask for their suggestions to streamline workflow or eliminate unnecessary steps and procedures. You may find they have been hoping you’d have this exact conversation for weeks (or even years!).

Reconsider the organizational chart.
Are there workers reporting to the wrong supervisor? Does it make more sense to combine the Training Department with Production? Are there holes in areas that could be generating revenue?  Shifting existing staff to these areas could improve workflow and increase revenues, while keeping your valuable employees motivated.

What can you do without?
There is nothing like eliminating positions to help you determine whether or not they are actually needed.  When the hiring freeze is over, fill revenue-generating positions first, then look back over your evaluations and decide which positions are most essential, and which ones never were.

When hiring again, don’t neglect employment background checks to screen out potential problem employees before they’re hired.

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.

When hiring new employees again, employment background checks will help you attract and retain the best candidates.