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HR

10 effective ways to deal with layoffs

Posted by Shivali Anand

December 13, 2021    |     5-minute read (950 words)

As fallout from the COVID-19 epidemic continues to wreak havoc on the global economy, some businesses have been forced to make the tricky decision to lay off workers. It goes without saying that managing layoffs is highly stressful for all concerned. Nevertheless, sometimes there is no other solution.

The process is disliked by the entire workforce, from the employees who are directly impacted and their colleagues who are left behind, to the HR managers who must carry out the layoff responsibilities. However, businesses that plan for openly communicating with affected employees while also keeping the business running can help smooth the transition.

Expert-vetted recommendations

A layoff is defined as a temporary suspension or a permanent cessation of work for economic reasons. Here are HR experts’ top 10 tips for dealing with layoffs and the downsizing process. 

  1. Be prepared to articulate reasons – Management will need to articulate clear reasons for the reduction in workforce. Outline the facts to your employees, such as the economy, revenue or market position. You must protect the company's reputation and ensure compliance with employment laws by providing the business reasons for the layoff.

  2. Establish a plan for executing layoffs – Determine which positions must be eliminated, and devise a plan that considers the number of workers to be kept or required during the transition period; how the termination will be communicated; severance packages; and how much advance notice will be provided to employees. Before you begin the layoff process, be sure you understand legal ramifications and are in compliance.

  3. Determine your strategy – Layoff discussions may vary from person to person and will be based on the business’s needs. HR must determine which workers will be retained, which will be terminated, and which will be furloughed or switched to contractor status, and then plan communications accordingly. Businesses should also create a systematic approach based on specific criteria for selecting employees to be laid off, based on company objectives such as performance, job classification, skills, remuneration or attendance. Also, consider whether it would be more cost-effective to lay off a single person from each department or an entire unit. You must also decide how long the terminated employees will remain working at the company (for instance, two weeks). Other employees will need to be notified and asked to take on new tasks to maintain the workflow.

  4. Evaluate team members you’ve decided to lay off – After identifying the number of employees to be laid off, it's time to evaluate particular workers based on numerous characteristics such as dedication, skills and salary. Employers may also wish to consider the length of the person’s employment. Take the time to assess whether you've made unbiased selections regarding race, ethnicity, national origin, religion or age.

  5. Handle layoff discussions with care – The cornerstone of every employee-employer relationship is mutual trust, which must be built throughout the employment cycle, from hiring to onboarding.  Similarly, you must endeavor to maintain trust and relationships amid layoffs as well. While it may be challenging to speak candidly with employees being laid off, employers must focus on expressing that the downsizing is required by the business due to economic conditions. HR will need to create a proper communication plan to handle the layoff process, both to safeguard the image of the business and to avoid legal complications.

  6. Provide transitional staff/employees with incentives and benefits – After selecting employees and determining the transition period, help them understand their importance. This may require providing incentives, retention bonuses and perks for transitional employees so they’ll continue to perform well. When layoffs are announced, many employees will likely quit immediately, even if they are required to finish out tasks in their final weeks. This is why it’s beneficial to offer severance to such employees. It increases the likelihood they will stay and perform to your expectations throughout their final period of employment with your business.

  7. Create severance packages – To make layoffs less painful, companies frequently offer severance payments to displaced employees, and this may also reduce the odds of legal actions against the employer. Some states have mandatory severance criteria. For example, ssalary continuations, premiums, outplacement assistance, continuous benefits coverage, vacation pay and employer-paid COBRA health insurance are necessary severance requirements in some jurisdictions.

  8. Be mindful of the Worker Adjustment and Retraining Notification Act (WARN) – If your firm has 100 or more workers and meets qualification standards for the WARN Act, you may be required to give employees 60 days' notice before they are let go. Under the WARN Act, employees and their families are protected from mass layoffs and plant closures under critical circumstances. Aside from that, the business must look into corresponding state laws to ensure that all rules and regulations are followed.

  9. Implement layoffs and notify the rest of the workforce – After planning and discussing all of the criteria, it's time to put the layoffs into action, explaining the reasons to employees, announcing and reviewing severance packages, and communicating that layoffs are an unfortunate but necessary evil for the company to stay in business. Later, notify the rest of the employees about the layoffs to dispel anxiety. This will help keep rumors in check. Encourage remaining workers to commit to work and fulfill their goals, and endeavor to stabilize the work environment when the layoff process has concluded.

  10. Offer support post-layoffs – Expressing your genuine gratitude to staff can help you create professional goodwill. Consider providing outplacement help through a third-party service to laid-off employees to foster a continued solid professional relationship. Career counseling, job search help and resume writing service could be of help during the layoff period. Employers can also offer letters of recommendation for laid-off workers to improve their prospects of finding new employment.

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