Managing Layoffs
From OrgChart.net
Contents |
Overview
Due to an unstable economy, tough staffing decisions like layoffs have become commonplace. Given the state of the economy, business might consider developing a sound procedural approach for managing ongoing layoffs. Any change in the fundamental structure of the organization must be handled carefully; this is especially true if it is a reduction in force (RIF) action, which typically is driven from a strategic objective of bringing about increased efficiency and productivity through lesser manpower. A badly handled layoff process can backfire bringing about catastrophic results, rather than the desired outcome.
Securing All Sides
Management of a layoff is critical and must be handled with utmost care. There must be a clear, consistent and systematic plan for any layoff. An important part of the “layoff plan” is the oversight committee which will manage the process. Using a transition team can go a long way in limiting the organization’s liability. The team must choose valid, objective, measurable selection criteria which are relevant to the company’s need for laying-off employees.
If the criteria for selection includes factors like work performance, then the organization should be prepared to explain its decision in such subjective cases. As such, extensive documentation at each step is recommended, as layoffs can trigger legal action from terminated employees. Further, the representation on the transition team should be as broad-based as possible, including relevant attorneys so no gap/ slip-ups occur on account of legal and regulatory requirements. This helps ensure compliance with state policies and also helps to mitigate the risk of litigation and penalties.
Once all such issues have been covered the Plan needs to be shared with the organization. It is important to be honest, transparent and communicate all relevant facts to the employees. Holding back information at this juncture often proves to be counterproductive. Once employees know there is bad news in the offing, there is more acceptance and preparedness to handle it. Stating the facts and the true financial picture makes sense and stems the potential rumors and false speculations which can cause damage.
Smaller firms need to be careful when executing layoffs as a large layoff can scare away potential business as well as raise doubts within in the industry about the organization’s solvency and sustainability.
Another point for companies of all sizes to consider is if an organization intends to trim the fat, it should be in one go, rather than a staggered one. A move which is over in one blow does less harm to the morale of remaining employees - a staggered layoff is likely to set off panic and subsequent fleeing of the talent pool. The organization’s management must also share a future projection so employees know where they are headed post-layoff; it is hard to achieve productivity goals with insecure and unsure employees.
Being Humane
It is extremely important for businesses to be humane and compassionate when delivering the bad news. Employees deserve respect and dignity during departures and should be given such. Impersonal delivery of such news can project the organization in a bad light and its public image may take a beating.
One way an organization provide dignity and respect is to provide outplacement services. This can go beyond the simple gesture of goodwill and become a genuine expression of interest in the welfare of the employees by seeing to it they are provided with assistance in finding suitable re-employment quickly. The task of managing layoffs will continue to remain an unpleasant one, however, it can definitely be made into a smoother one with less heartache and liability.
