How do I prepare for a workforce reduction (“layoffs”)?

A question submitted to our Ask Me Anything sessions.

Barak: The question is "How do I prepare for a workforce reduction?" This is coming from a midsize business leader. “Workforce reduction” translates to "How do I do a layoff?" Marta, do you want to kick us off here? Marta: Yes, this is a very heavy, loaded topic. Unfortunately, sometimes it needs to happen. First of all, companies have to be thinking about if they have explored all their options to avoid having to go this route?

Basic things to consider: Have you done salary freezes? It's not ideal, but sometimes that can help give you more time to figure it out, if you're waiting for new clients. Also, salary reductions. I know it's not ideal, but I have worked in some companies where leadership has been like that so we could continue to keep all our employees.

Other measures, too, but sometimes there's nothing you can do. And the bottom line is not there and you have to think about a reduction in force.

So the first thing, look at your workforce and just be sure that when you are laying off employees, that you don't have a huge [demographic] disparity–you’re not mostly laying off people of a certain race, age or gender.

The way you conduct the layoff speaks to the character and the culture of the company as well. I don't know which company it was, but there was a company that, the day before they were doing a layoff, they had a concert. That's not very appropriate, to be having a huge concert when you were going to be laying off people. These are things you definitely need to keep in mind.

Also, talking about mental health and caring and offering extra support to employees during this time is huge. So both the ones that you're laying off–treat them with dignity–but also the ones that are staying. It is crucial this is done properly.

Also, just be human-centered when you are having to have these conversations. Be clear and concise. I know people in some companies are like "Oh, am I being laid off?". And it's not even very clear if somebody is being laid off or not and that's horrible. Something like that could happen, and it has happened. Provide everything, when possible in writing.

And then–this is more tactical but a very important thing–when you're laying off somebody, put together a good packet with all the information for this person. Let's say that you cannot use an outplacement service, but in your company you have somebody who is very good at giving you tips, interview training or writing resumes. All of those things would be a good thing to offer, plus information on job boards and other companies that are hiring. If your company provides benefits, providing them with COBRA notifications, how to apply for unemployment. If you put together a little package with all of this information for your employees, you really will help them.

One other little thing is just timing. When you do that is crucial, you know? You don't want to be doing this on a Friday and then you are the HR person and they're like, "Oh, you've been laid off today, phone me if you have any questions,". And now it's Friday at 5:00, and I have all these questions that I don't know who to ask. So, don't choose a Friday afternoon. Don't choose a date that is close to a holiday where you're going to have a three day weekend.

Also, after the layoff, just to be sure that there is a very good communication with your current employees and leadership–that's crucial. Like, “How are we going to be moving forward now?” Talking about morale and productivity, when you're seeing coworkers leaving that you have worked with for a long time. “How are we going to be moving forward and get energized again and continue to do our jobs?” Barak: I really appreciate how thorough you were there. Is the layoff really the best strategy to accomplish these–essentially–financial goals that we have that's causing us to think about this in the first place?

I appreciate that you addressed the meta view on a layoff. If you're not careful, it can disproportionately affect a certain group of people, that then becomes part of the story of the layoff. You wouldn't know unless you make that analysis, right?

I appreciate you talking about resources to share with employees as simple as resources that are outside of your company that you maybe can't sponsor. But, when you can, going the extra step to sponsor some of those career services resources.

And reinforcing your investment in your remaining workforce as the final piece of letting the folks that are still a part of the organization know how you plan to proceed, as opposed to pretending it's just business as normal, and of course it is anything but…

Anything you want to add to that, Elena? Elena: Yeah, one more thing about layoffs is that there are instances where you're required to offer the person you laid off their job back in the event that you need it again. So if you got rid of a position and then two months later, you're like, "Oh, no, we need that position back," there are times where you might be required to recall impacted employees. So that's something to bear in mind as well. And depending on the size of the group that's impacted, there are some regulatory requirements as well. Barak: What are those size thresholds, just so that folks tuning in can understand kind of when they should start thinking about the applicability of that? Elena: They depend on your state, so some are 40, some are bigger or smaller. It depends on the size of your company as well. There are a lot of thresholds and levers and switches in there that are very nuanced. Barak: So check with an HR Professional near you. Elena: Give us a call. Marta: Yeah, and compliance applies here too. You assume you're in compliance and you're not going to have any liability but not if you don't follow the specific laws of your state or your city. So, we're never going to get away from compliance. Elena: I think one of the things that covers all of the topics that we just talked about is the way that we treat people. Our reputations can be affected by these things, but also the expectations of our society now is that we are more mindful of each other and ourselves. So I think that the repeating theme here is to just remember we're humans. Treat everybody respectfully coming into the company and leaving the company as well. Some of these people end up being your clients some day. Sometimes they end up being mutual friends down the line, or I've seen very many times they end up being your boss someday. So be good to people. Barak: That's a great note to end on. Marta, any closing remarks?

Marta: Just like Elena, I will say, everything relates. People are at the center of everything. You want to be sure that, from the time you are engaging somebody to work in your company, during the time that they work in your company and you're dealing with them, from the time they leave, always care for your employees: your employees, your managers, leaders–the whole company from the beginning to the end.

Even if you are doing a layoff, one of the most difficult things that you have to do in the workplace, just being able to say "I did everything I could for that person" makes you feel good. Elena: Humans are complicated, but we're humans when we're at home and we're humans when we're at work. Employers have to deal with that.

Marta: Keep the human in human resources.

Disclaimer:

The content present in this recording and transcript is for informational purposes only, designed to improve your general understanding and does not constitute legal advice. Before taking any action based or relying on the content provided you should always seek legal advice from a qualified attorney authorized to practice law in your jurisdiction.