I have faced many challenges in my 35+ years as an HR leader, but none were as gut-wrenching as the several large-scale layoffs I had to manage. It’s never easy knowing that you are negatively impacting the lives and families of the people you care about.
There is no such thing as a "great layoff." However, leadership teams and HR leaders can take steps to make it less painful for impacted employees. In this article, I will share how your organization can manage through the turbulent times while providing a dignified exit and soft landing for those impacted.
A successful layoff ends with exiting employees landing on their feet and those left behind with the feeling that the company treated their friends and “work family” with respect.
I have had people follow up with me months after a layoff to share that they have a new job that they love. They are thankful that we “forced” them to have to make a career transition that they might not have made in other circumstances. I have also had layoff survivors tell me that although the event was awful, they appreciate how the company handled it and they were proud to work for an organization with heart.
How you treat the people you are laying off says a lot about you as a company and will be watched very carefully by those who you would like to retain. Careful planning is key to making a reduction in force as successful as it can be. A poorly executed layoff can result in a PR disaster, which only makes a hard situation worse.
Here are 4 ways you can help provide a graceful exit and a soft landing for the employees being laid off.
Do have a meeting schedule laid out so everyone who is communicating knows where they need to be during the action.
Do have at least two people in every meeting (preferably with HR as one of them).
Do make sure that the people communicating the message are well prepared and armed with talking points and FAQs. Select these people carefully.
Do make sure that you prepare your leaders in advance and arm them with the same talking points. The last thing you want is for your senior people to sing from different song sheet.
Most people are in shock and don’t hear anything you tell them after “today will be your last day”. Having the information in hand allows them to process the news and then refer to the resources in private later.
Email the information to a personal email and if needed, send a physical copy to a home address. Note: a lot of people moved during the pandemic. Ensure you have an up-to-date email and address.
Provide one point of contact in HR.
Have boxes (if on-site) and return labels (if remote) ready to go.
If you are a small company, partner with a third party like Rippling to manage the return of equipment.
Provide an EAP benefit people will actually want to use.
Partner with an outplacement firm that offers services your outbound people will use. Modern outplacement services like Placement's give your people the flexibility to work with a certified coach on topics rangings from resumes and interviews to life problems and career direction. Instead of locking your people into a rigid program, you provide them with a package of credits for them to use on services they need most.
I cannot stress this point enough: ensure the package is fair and showcases your commitment to those leaving your organization. In the short-term you truly help those who have positively impacted your company, protect your company brand from a PR disaster, and demonstrate good intentions to your staying employees. In the long-term, going above and beyond during a layoff can help you retain employees, improve morale faster, increase engagement, and help attract new talent when the time is right.
Consider providing COBRA coverage for employees for a number of months. Even one month helps!
Once you are comfortable that you are doing what you can for the people leaving, it is critical to step back and think about the layoffs' impact on those who remain.
According to reporting from SHRM, companies that laid off 0.5% of their workforces sustained an average annual turnover rate of 13%—2.6 percentage points higher than the average annual turnover of companies that didn't cut staff. In other words, more than five times more workers than were laid off left of their own accord. In addition, the more people companies laid off, the higher rates of quitting they sustained.
Therefore, it is critical to have a plan to prepare for the aftermath of layoffs. How will you rebuild the trust that employees will lose? How will you demonstrate your commitment to the "survivors" so that you don't lose even more valuable talent?
Here are six ways to help your continuing employees move past the anger, anxiety, and sadness of watching their coworkers walk out the door
Make sure you explain what is happening, why it is happening, and how it will happen.
Communicate at the beginning of the action and at the end. Clear communication will help reduce the anxiety of the employees who remain by making it clear that they are safe.
Build multi-day messaging that follows the action. Layoffs are not a one-day event and require additional intensive employee engagement efforts for months after the action. It will take time and effort to rebuild trust after the action.
Plan to keep your finger on the pulse of your employees. Conduct quick polls or pulse surveys to stay connected.
Plan to conduct focus groups or roundtables with your executives to give people a chance to openly ask questions to leaders.
Plan to be transparent in regular communication on how the company is doing financially.
Pay special attention to your remote employees. Make sure you have multiple people queued up to connect with them more frequently. Have the department head or another influential leader schedule a zoom “happy hour” to check-in.
Choose trusted leaders to deliver the important messages.
Provide FAQ’s and talking points. Be clear on what is happening (layoffs) and why they are happening.
It is advisable not to get into a conversation about how some people were selected to be laid off over others. The question will be asked and it’s important to make sure that your leaders have an answer that is direct but not specific to any one person or group. For example: "Decisions on who is being laid off were based on the expected needs of the business over the next 12 months."
Require people leaders to meet with their teams face-to-face (or Zoom) at the end of the day to check-in and answer questions that employees may have.
In situations where a senior leader will be leaving, be prepared ahead of time to tell those people to who they will report. Have the new leader available for meetings.
Respect people’s need for space for the remainder of the day, but not longer. Make sure to get right back to a normal schedule as soon as possible. Grieving will take some time, but focusing on the work helps to keep people productive.
Provide access to support such as EAP programs.
When appropriate, consider setting new bonus targets that are aligned with the needs of the business in the new reality.
Invest in coaching and other development opportunities that show employees that you will continue to invest in the people who remain.
The employees who “survive” the layoff will go through a process that looks a lot like grieving. Be patient, supportive, and overcommunicate.
Provide them with a safe outlet, like an outside career coach to work through the stress and frustration.
Holding expensive sales meetings and executive retreats after a reduction in force is a double edge sword. On one hand, they can be important and may increase morale for the participants. On the other hand, they may be seen as insensitive and a “waste of money” that could have been used to pay the people who were laid off for a little longer. Avoid lavish spending on anything for at least 3-6 months after the layoff.
Many good companies will have to conduct a restructuring or a layoff during less favorable market conditions. A growing list of reputable companies like Klarna, Peloton, Robinhood, and Carvana already announced their layoffs. If your company is in a similar challenging situation, we hope this article helps your organization be more prepared to navigate with care.
Does your company need additional support managing through a layoff process? Placement's many Leadership Coaches with deep HR expertise can jump in with your company's leadership team to plan and execute your action.