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Dan Coffey, executive career coach and practice leader for outplacement services at the Impact Group.
Conducting layoffs is one of the most difficult things that HR may be tasked with. We've all heard chaotic and stressful accounts of employees being shocked with the news they've been let go; stories of security guards escorting workers off the premises; tales of workplaces where rumors spread like wildfire in a vacuum of information; and allegations of supervisors protecting their favorite employees instead of high performers.
A downsizing is a significant blow to the morale of the organization, but it may be necessary to keep a company afloat and can be done in a thoughtful way—that is, strategically, with compassion and in compliance with all relevant laws.
Dan Coffey, executive career coach and practice leader for outplacement services at the Impact Group, a career transitions firm based in St. Louis that specializes in employee outplacement, relocation and talent development, discussed with SHRM Online how HR can prepare for what is likely going to be a very trying time for all involved—a reduction in force.
[SHRM members-only how-to guide: How to Conduct a Layoff or Reduction in Force]
SHRM Online: How do you strategically select which employees will be laid off?
Coffey: Employee costs can sometimes exceed 40 percent or more of a company's budget. During volatile economic times, it may be necessary to look at this large expenditure and calculate where savings can be made to rein in expenses, remain competitive and boost the bottom line.
When position eliminations and job consolidations are being considered, it is important for the process to be objective and focused on making the business more effective. The best practice is to conduct a work analysis followed by a people assessment.
In the work and organization analysis, HR and senior operations executives need to:
Once the work analysis has been completed, an objective people assessment can be made by HR, the business manager and legal. Important steps in this process are:
SHRM Online: How do you avoid claims of discrimination or disparate impact during a layoff?
Coffey: Being laid off is an emotional event that can leave one feeling wronged, no matter how well the company has complied with federal and state laws and planned the layoff. One misplaced comment by the manager giving the separation message can unnecessarily fuel the feeling that one is being wronged.
There are three critical steps a company can take:
SHRM Online: What are some WARN Act considerations?
Coffey: The Worker Adjustment and Retraining Notification Act [WARN Act] sets rules for requiring employers of more than 100 employees to give a written layoff notice of at least 60 days before any plant closing or mass layoff. Some states also have WARN acts that may have even stricter requirements and may apply to even smaller workforces. Start with a plan early and involve your company's legal advisors.
Questions you may ask during the planning are:
SHRM Online: What are some tips for conducting the layoff itself?
Coffey: Best-practice recommendations for conducting the layoff include:
SHRM Online: What are some tips for determining severance packages?
Coffey: Most companies offer employees who have been laid off severance pay, outplacement assistance, continued health benefits and priority consideration for reassignment to another job within the company. Some considerations in determination of the severance package include:
SHRM Online: What about a few tips on how best to communicate about the layoff to staff after the event?
Coffey: Every employee is affected by layoffs in their department. It has been suggested that employees not being laid off also experience grieving emotions. Here are some tips for keeping teams engaged after a layoff:
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