Very few of us can remember a stranger, more perilous economic time. Businesses of all sizes are shedding employees, furloughing others, and asking those whose jobs remain to do more with less. Americans have filed 36+ million unemployment claims as of early June 2020. As businesses adjust to the COVID-19 economy and Paycheck Protection Program funds wrap up, we are likely to see additional layoffs.
If your company is in the difficult position of needing to downsize, here are some important considerations before you implement a reduction in force in a humane and compassionate way.
Have a Plan
How companies navigate hard times today will determine their success tomorrow. Treat people well through this difficult situation, and you will improve the morale and productivity of your remaining team, avoid unintended loss of staff, support your brand’s reputation as a good employer, and be well positioned to recruit again when the economy turns around.
To get there, you’ll need a plan, which starts with taking a close look at all of your cash-saving options and how each will impact your business. Who stays, who goes and why? How will you stay in compliance each step of the way? How will your remaining workforce efficiently and effectively cover the work that needs to be done?
Navigating your options can be daunting, but experts can help you weigh your options and make the best long-term plan.
No Surprises. Ensure Separated Employees Understand the Decision.
Transparency and ethical decision-making are critical to any business transition, especially terminating someone’s employment. Your company is more likely to have a positive transition if your outgoing employee has a clear understanding of the situation and why you are making the decision to end their employment. While many states are “at-will” or “right to work”, it is a disservice not to be forthright with relevant information or data behind your choice.
If you are terminating someone for poor performance, he or she should not be blindsided or surprised. A transparent, ethical company will have previously made attempts to help the employee improve or correct the poor performance. Despite having ample chances to improve, the employee has not. Revisiting previous performance documentation and failure to meet expectations should be discussed as the reason for termination.
No Gaps. Get Employees the Information They Need ASAP.
Any employee who is laid off or terminated for performance or other reason is entitled to resources and assistance in understanding:
- State unemployment insurance
- Last day of benefits coverage and COBRA information
- Final day of employment
- Final pay date
- PTO or vacation payout (if applicable)
- Severance details (if applicable)
These resources should be given to departing employees (in physical and digital form) when they meet with their manager and HR. Provide the separated employee with contact information for the HR representative's to answer any lingering questions. This is a good-faith effort and demonstrates that your organization cares about a smooth transition.
When letting someone go, it is important that you take the necessary steps to stay in compliance with state and federal employment laws (WARN Act, state-specific final pay laws, COBRA, etc.). If you are unsure about how to do this, or have audit obligations to meet, there are experts who can help you.
Avoid Awkwardness. Plan Through Each Step, Then Plan for That to Go Wrong.
Nearly all employment termination meetings are a combination of tense and awkward. Here are ways to mitigate this:
- Plan everything: Each participant (managers and HR) should know what they will say and in what order. Also, everyone should know what happens after the meeting, especially the protocol for the separated employee departing work on their last day.
- With the help of HR and any key team members, come to consensus on a plan and stick to it.
- Your team needs to be able to answer:
- Where and how should this meeting take place (whether physical or virtual)?
- When will the separated employee clean out their work station or will we do that for them and return personal items?
- What are the security and compliance aspects of this termination?
- What is our plan if things get overly emotional or worse?
No Hard Feelings. Create an Empathetic Exit.
What does it mean to provide a separated employee with an empathetic exit? Think of their mental and emotional health, as well as the morale of your remaining team, which likely includes their friends and allies.
Everything we have considered so far builds toward an empathetic exit. Executing it, however, can be complicated. Here are some important guidelines:
- Understand and discuss that this will be a difficult conversation for everyone, but especially the person who is losing their job.
- A successful termination meeting includes:
- Anticipating responses ranging from despondency to anger
- Allowing the employee time to take in the news
- Allowing the employee to vent, but not at length
- Listening actively and agreeing or correcting the record as needed
- An empathetic exit doesn’t always translate to an easy departure, but it definitely minimizes the chance that the separated employee leaves with hard feelings.
Consider Outplacement Services to Help Your People Land New Jobs
Many companies choose to invest in helping their employees find new employment, which can pay off long term because:
- The sooner your outgoing employee finds a new job, the less your company will pay in unemployment taxes.
- This is a strong show of goodwill. Your former employees will appreciate and remember that you helped them protect their financial futures, which boosts your reputation as a great employer.
- The stronger your employment brand, the faster and easier it will be to recruit and grow your team again when the economy turns around.
- By treating your people well, you are less likely to incur costly litigation expenses from former employees taking legal action against your company.
One option for human-focused, affordable outplacement services is NextPlacement, a collaboration between recruiting experts, Creative Alignments, and HR experts, CuraHR.