Staff layoffs are difficult for everyone involved, from executives to ground-level employees. In most companies, staff layoffs are the last resort, enacted to prevent the company from collapsing or falling into irreversible financial ruin. The way you handle the process can have long-lasting ramifications, both internally and in the industry as a whole.
For the human resources department, the layoff procedure is never pleasant. Once rumors of staff layoffs have started circulating, it can set everyone in the company on edge. Instead of allowing imaginations to run wild, hold a company-wide meeting. Explain the situation and be transparent about the company's problems. If possible, give specific numbers to illustrate how dire the situation is. Talk briefly about the efforts that have been made to avoid staff layoffs, and let staff know exactly how many people will be let go. If you have a specific policy, articulate it. Though this information is not heartening, it can help quell wild rumors.
As soon as possible, start the layoff procedure. Call employees into HR, inviting the manager in if possible, and explain the transition clearly. If you plan to re-hire employees once the financial crisis has passed, state your plan. If not, be clear about it up front; in doing so, you'll avoid instilling false hope and allow the employees to move on. Give a specific timeline for the layoff process and talk about severance packages and insurance. By presenting the information clearly, you can avoid confusion and help the employee deal with the shock. Once the meeting is over, Fast Company suggests that you have packing supplies ready for the employee so he can get out quickly and with minimal embarrassment.
When staff layoffs happen, many employees aren't sure where to turn. To make the transition easier, make an effort to offer resources. Explain your state's laws for unemployment or other government assistance. Refer the employees to a professional organization that can help with the job-hunting process. If possible, refer employees to specific open positions and make a phone call to recommend them to another company. Provide positive letters of reference for all employees who are let go. This extra effort toward a gentler transition can demonstrate that you care about the well-being of all employees, which can help mitigate the layoff stress across the entire organization.
Staff layoffs can take a serious toll on the remaining workers. Some may worry about the security of their own jobs; others may be angry with the company for taking away the livelihoods of their friends and colleagues. Motivation and morale can fall dramatically at this point, further sabotaging overall productivity. While there is not much you can do to control the emotional response, you can take steps to minimize its impact. Make an effort to communicate with the staff members that remain employed; secrecy and vagueness only serve to breed distrust and discontent. To help them feel more stable, update them regularly on the financial progress of the company.
The way you handle staff layoffs can cement your company's reputation in the industry. By encouraging transparency and treating employees with respect, you'll be ready to take the next step toward business survival.
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