Layoffs, sometimes also termed downsizings, rightsizings, restructurings or reduction in force (RIF), can be difficult regardless of company size. They can have challenging implications for companies big and small. When we hear about layoffs in organizations, we also hear about different tactics and approaches to take. We’ve decided to include some layoff best practice guidelines below. Hopefully these will be helpful for anyone that has to conduct a layoff.
Best Practice 1: Timing Matters
Deciding when to conduct the layoff is important. This includes the time of day, the day of the week, the time of month, and the time of year. Tuesdays are, in the opinion of most HR professionals, the best day to do this. Never on a Monday or Friday – that’s a solid layoff best practice. Yet a lot of times, the timing is out of your control.
However, when it is under your control, other macro elements should also be considered. Conducting a layoff before a big holiday, for example, can have morale implications for the remaining workforce. If you lay off a team member or an entire team after a big project, you might send the message that hard work does not pay off in your company. Or if you conduct a layoff after Q2, you might send a message to the company that Q1 was unsuccessful. The most important thing is to make sure that your actions are consistent with what you want to communicate.
Best Practice 2: Do it in person
We almost always advise business Leaders to conduct layoffs in person. If you are operating remotely or virtually, it is okay to conduct them over the phone or via Zoom. However, it’s almost never advisable to conduct a layoff over text message, email, or chat. The same rules apply for ordinary individual terminations. Do it face to face and in a mature and thoughtful way.
Best Practice 3: Do it individually
We generally advise against laying workers off in a group setting. Sitting down individually with employees, answering their questions, and providing some compassion and empathy is way more beneficial for everyone involved. You may be pleasantly surprised at how some people react when laid off.
While there’s certainly the opportunity for a worker to become explosive or upset, many times someone being laid off appreciates that they were given the work opportunity for work. The ability to discuss the termination, and the ability to express their opinion, can go a long way. Many workers just appreciate that someone spoke to them about the termination of their employment in a dignified manner. We’ve seen instances where laid-off employees offered to help with the layoff of other team members.
Best Practice 4: Explain next steps
For any layoff, a best practice is to remember that it’s still a shock and direct hit to someone’s life and livelihood. Often times, the person conducting the layoff has been planning or preparing for it for sometime. Therefore, to them it may not seem like such a big deal. Remember to explain to the departing employee(s) what next steps look like, including whether the terminating employees will receive a severance offer.
Discuss whether and how the company will support the departing worker after their employment has ended. Will the company provide letters of reference to the departing employees? Will the company reach out to the departing employees if the company’s financial picture changes? Are employees eligible for rehire at any point down the road? Will there be opportunities to work with a vendor or partner of the company? These are all items that we recommend companies address proactively during layoff discussions.
Best Practice 5: Define it as a layoff
It can also be comforting for an employee to learn that their job is being eliminated because of a layoff. Telling an employee their position is being eliminated because of lack of funds or work may even be a relief. Some workers will take comfort in finding that their termination is not a result of something specific that they had done or not done. And this also helps with how the departing employees view the company on their way out the door. Most people who are involved in terminations (HR, executives, management, etc.) will tell you that the more that you can allow a departing employee to retain their dignity, the better off the company will be in the long run.
Best Practice 6: Numbers can matter
Furthermore, it’s important to be able to demonstrate how you decided which employees to lay off. Layoffs come under the HR “bucket” of selection. Anytime you select one or more employees for a specific employment action (in this instance, a termination due to reduction in force), you run the risk of potential discrimination or adverse selection claims.
For example, you have 10 employees in a department, and you lay off only five of them. You should have a good rationale for why you selected those five to be terminated. It may be that they were the most recent hires. Or they were the highest paid employees, or employees who received the lowest performance scores. We always recommend documenting these decisions, since documentation is one of the items you can use to defend against claims of discrimination.
Best Practice 7: Hold a “layoff survivors” meeting
One of the biggest concerns of employees who don’t get laid off is wondering when the next shoe will drop. It’s often helpful to have a meeting with anyone who did not get laid off to explain whether or not the company intends to have any more layoffs. You shouldn’t make any promises, but you should be able to give direction and general guidance. Waiting around to lose your job can have a terrible impact on job performance and morale. Survivors meetings can be a mix of sharing business plans going forward, explaining new workload/processes/routines, and taking questions related to the new org structure.
Best Practice 8: Communication pre and post layoff
This is similar to the last point. There should be communication to employees that were in the department or on the same team where the layoff occurred. You’ll also want to consider broader communication across the company about why the layoff occurred, what the company expected to achieve from the layoffs, and what it means for the organization going forward. Anyone with a public facing role, like executives, HR/recruiting or PR, should develop talking points related to how to address the layoffs in public.
Best Practice 9: HR and Finance together create the best outcome
Growing and succeeding as a business after a layoff is truly a job for HR and Finance together. Finance will need to create a new financial plan or model that updates salary and wages, expenses, and possibly operational costs/revenue. HR will help to roll out that new information and make sure that new and existing team members are on board. This may involve setting new goals and recruiting for new positions. It may also involve making changes to new or existing jobs within the organization. HR should be aware of the Federal and State laws that govern layoffs (which usually apply to employers with 50-100 employees or more). A good place to start when it comes to notice requirements related to layoffs can be found here.
Best Practice 10: Decompress
Lastly: conducting a round of layoffs is HARD. No one ever went into business to become a heartless “axman” or “axwoman” intent on ruining people’s jobs and livelihood. The feelings that many people have after any termination (including a layoff) is a form of sadness and grief – and should be treated as such. If you’ve been involved in conducting a layoff make sure to take a step back and remind yourself that you’re doing the right thing. Tell yourself that the people who you laid off will find a way forward (just as they did when they joined your company). Remind yourself that the company and the remaining employees are in a better place because of the actions that were taken.
Layoffs are never easy. But take time to find a best practice or two (or ten) to effectively conduct a layoff. Take advantage of these ideas and remember to comply with federal and state regulations regarding how to conduct a layoff. If you need concrete advice on how to conduct the termination meetings themselves, see our eBook: Guide to Employee Terminations or contact someone at Suitless.