Thinking of conducting layoffs? Here are some things to consider before making that move.
Having to let someone go from a small business is never easy, but it is sometimes necessary. It is even harder to do when it is a layoff situation because it typically isn’t anyone’s fault. There isn’t a final incident to point to, performance issues or policy violations. It is more than likely outside influences such as the economy, industry slowdowns and the like that are forcing the hand of the small business to cut back to be able to sustain and then (hopefully) recover over time.
With the current state of the economy, a lot of small businesses are determining if they need to consider cutting expenses and what that looks like. The first step is to dig deep into the financials and really get an idea of what is happening in the business. It might feel a certain way, but numbers don’t lie and can really tell the story of the business. Using that data, it is easier to determine next steps. Are layoffs required or are there other ways that either expenses can be reduced and/or revenue can be increased?
If it is determined that layoffs are the only option, it’s now time to identify what positions, when it will happen, if there will be severance and if so, how much, will outplacement services be made available to separating employees, what is the impact of the layoffs to the rest of the company and remaining employees and what state and federal employment laws need to be considered through the process.
These are all very difficult decisions that shouldn’t be taken lightly and should be planned out with key members of the team or outside HR, Legal and/or Financial consultants so that all aspects are considered and that both the business and the employee are managed appropriately through the layoff process.
Once all the final decisions have been made, it’s important to prepare a communication plan, both verbal and written communications. If you're a business owner or manager that is in a position of laying people off, keep in mind that they don't hear anything after the words that they no longer have a job. It isn't that they don't want to know what you're saying or don't have a million questions about their pay, benefits, any potential severance, timeframes, etc. It's that they are not able to really process it in that moment. They might hear what you're saying but aren't going to retain the details.
It is important to have all the applicable details about final pay, benefits, severance, PTO/vacation payout, unemployment, outplacement and any other information clearly outlined in a document that gets either emailed to them after the meeting or provided to them at the time of the meeting so that they can take it with them. This will give them the opportunity to digest the information on their own time when they are ready and can focus on the details.
Lastly, layoffs are a difficult time for everyone, both the person being laid off and the person having to conduct the layoff. However, when delivering the message to the employee being laid off, try not to say things like “I hate to do this” or “This is hard for me to tell you this”. When saying things like that, it makes it about the person delivering the separation message to make them feel better, taking away from the employee being laid off making them feel much worse.
Again, this isn’t an easy situation for anyone, but it is important to take the time to plan appropriately and consider all impacts as well as the feelings and emotions that it evokes in everyone involved.
Don’t go at it alone, we are here to help.