Minimizing Layoff Risks
From OrgChart.net
Overview
Any reduction in force is fraught with risks for the organization laying-off employees. It is a very delicate process and any slip-ups can cause the organization to fall behind several years or may even threaten its existence. Organizations need to be very careful and take all the necessary steps to ensure that intended objectives are achieved without any undesirable consequences.
Dealing with Risks
Here’s a how the major risk factors during layoffs can be dealt with effectively:
- Let there be an emphasis on consistency from the beginning. A sound strategy, consistent approach and objectivity will go a long way towards achieving goals.
- There should be a committee overseeing the layoff process in the organization and this must have diversified members ensuring proper representation and fairness.
- In fact, it makes sense to freeze all recruitment activity for the next six months, so that no questions are raised about the layoff. There could be a freeze on promotions also validating the move. Prior to selection, critical positions and talent must be analyzed and set aside so that the organization doesn’t lose any crucial employees.
- It should be ensured that the criteria for selection of employees for the layoff are objective and uniform across the board. Intelligent software can help in determining employees who qualify for layoff using unbiased, uniform criteria. Organizations can reduce the risk of lawsuits pertaining to wrongful terminations or discrimination by ensuring fair treatment.
- Once the selection has been done and employees to be let go determined, the committee must analyze the pool to see if the selection is unevenly impacting a class of workers. There are legally protected workers groups and classes and any decision impacting them unfavorably could spell trouble.
- Employers should avoid paying any attention to the employee’s leave history while determining whether the employee should stay or be given the pink slip.
- The employers must maintain elaborate documentation about every move and every decision from the start, especially if the criterion for layoffs is subjective. The defense for such a decision must be sound and ready.
- Compliance with state laws and regulations is vital. Larger employers must consider the federal Worker Adjustment and Retraining Notification (WARN) Act, according to which employers engaging the services of 100 or more employees must provide employees a 60-day notice prior to laying off more than 50 employees.
- It pays to consult the most recent releases, where laws and regulations are concerned. Laxity in this area could end up costing the organization dearly.
- All required notices and documentation should be provided to the departing employee. For instance, the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 requires the employee to be notified of his rights at the time of termination. Information regarding medical benefits, unemployment benefits etc. are the terminated employees’ right.
- It is important that the task of calculating and disbursing final pay to the leaving employees be handled with exactness and on schedule. All wages earned and unpaid should be given out immediately - inclusive of any bonus, commission or vacation earned.
- Drafting of separation agreements/severance packages must be done carefully to prevent any litigation from arising in future. Software solutions are able to render several scenarios, from which a relevant one can be chosen to fit the case. Also, exact calculations and checklists ensure error free and timely processing.
- Ensure that there is a proper communication channel. The benefit packages, support services and outplacement services, if being provided, should be made known to the impacted employees.
- The layoffs should be handled as humanely as possible. Abrupt termination without any sympathy or empathy can bring about more problems than a compassionate handling of the events.
