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Layoffs Require Communication, Compassion and Compliance

An older man in a black jacket and white shirt.
​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:

  • Analyze the systems and processes necessary to deliver the business.
  • Define the organizational design, roles and positions to achieve deliverables.
  • Identify the skills and experience required to do the work within these positions.

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:

  • Assessing people against their actual skills for each position or role.
  • Selecting people for best fit with the desired positions and roles. Consider skills, experience, potential and learning ability.
  • Ensuring decisions meet EEOC [Equal Employment Opportunity Commission] tests.

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:

  • Follow federal and state employment laws covering discrimination.
  • Create a concise business case for the purpose of the layoff event. Ensure business reasons for the layoff are clearly communicated in the separation meetings, remaining employee meetings and statements given to media. In one-on-one separation meetings, focus on the business case and not on the employee's performance.
  • Ensure managers delivering the separation message are thoroughly trained on how to conduct the separation meeting.

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:

  • How many people will be impacted? You may at first estimate and then solidify the number as you gain more information.
  • At what date will the company deliver the news? Will everyone be notified on the same date, or will the notifications be phased?
  • How will the company deal with situations where managers must deliver notifications while being impacted themselves?
  • Will the company need to do a WARN notification 60 days in advance?

SHRM Online: What are some tips for conducting the layoff itself?

Coffey: Best-practice recommendations for conducting the layoff include:

  • Having managers meet one-on-one with each individual being impacted during the notification meetings. This is the first signal to employees that you respect them as individuals.
  • Delivering all notifications within a short period of time. This will alleviate the concerns of the employees you are seeking to retain.
  • Having representatives from the company's employee assistance program onsite the day of notification to provide emotional support to any who need it.
  • Having the outplacement provider onsite for the notification day. After the notification meeting, provide the opportunity for the employee to meet with an outplacement coach to explain the career continuation service and provide a direction of hope.

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:

  • Offering salary continuation rather than payment of one lump sum. The probability of employees suing the organization while they are still receiving a check each payday is very low.
  • Continuing to pay the severance after the person accepts a new position. Separated employees will often delay starting their job search, thinking they will lose some of their severance. They may miss out on a potential offer they could have had.

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:

  • Once layoff notifications are complete, communicate with remaining employees as soon as possible in individual and group meetings. Meet with all the employees and not just a select few.
  • Communicate information about the fact that notifications did occur, the company's rationale, and any change in work responsibilities and reporting relationships.
  • Acknowledge the feelings and concerns of remaining employees.
  • Communicate concern for the people who have been separated and that they are receiving severance packages and career continuation services.
  • Discuss upcoming next steps, including meetings to reinforce departmental goals, roles and responsibilities. Meet with individuals whose jobs are changing to clarify roles, objectives and career opportunities.
  • State your availability, and be available. Answer questions that you can address. Don't give answers if you are not sure of your response.
  • Take care of yourself. This can be an emotionally and physically draining time. Caring for yourself is critical during peak stress events.

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