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Major Mistakes Businesses Make When Laying Off Workers: Employee and Business Impact Special Report From: EasySmallBusinessHR.com
Laying off workers for financial reasons or because of a change in how the work gets done within a company is an unavoidable necessity for many businesses. For those employers in this unenviable position, matters are often made worse by not having a thoughtful process in place before taking the action of laying off staff. Layoff is difficult for everyone involved in the process, but there are some actions that can make a bad situation worse: Ambush Style Layoffs How often have you heard stories about companies that use the element of surprise when laying off workers? Typical scenario: The unsuspecting employee arrives to work and is greeted by security or a burly manager from “Shipping” whose role for the day is now “Escort”. The employee is led to their office or locker, where someone stands over them while they pack their belongings, then they are shown the door. The employees’ direct supervisor is nowhere to be found, leaving the dirty work to security or maybe a less seasoned manager. Who Changed The Locks! In this scenario, the employee arrives at work and finds that they are not able to enter the building. Or the employee goes to their office and finds that their key doesn’t fit in the lock. Interestingly enough, there is no one around that knows what is going on, or who wants to admit that they know. Easy Small Business HR 1
The Phone Call Some employers take the “easy” way out and use this method to avoid facing the employee altogether. The employee gets a phone call letting them know that they should not arrive at work in the morning because they have been laid off. The details are sent to them by mail, if at all. If any of these scenarios sounds familiar, it’s time to take a different approach! Treating employees callously has an impact far beyond the events of the day. Best approaches? Meet with the affected employee and tell them why their job is being eliminated. Discuss any details related to pay owed to the employee, and when they will receive their last paycheck if applicable. Give the employee a letter that summarizes your discussion and let them know that you or the appropriate representative is available to answer any questions once they have had time to let the notice of their layoff sink in. The laid off employee is not the only person negatively affected by your decision. Layoffs have a significant impact on your current employees and very likely your business, at least for the short term. How soon you recover from the fallout will depend on how you approach the layoff process. Impact On Laid Off Employee Losing one’s job is one of the most stressful experiences a person can endure. It is not uncommon for employees to go through stages of denial, anger, betrayal, and depression when losing their jobs; even when the employee understands the reasons for the layoff. Interestingly enough, there are also those employees who are relieved that their jobs have ended!
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Impact On Those Left Behind The stress isn’t reserved for those who have been laid off. Some of your employees may also be angry, confrontational, or withdrawn. Others will either start looking for other employment, or question your actions. Most will be afraid that they are next in line to receive their walking papers. This is not the time to stay behind closed doors. Have a communication plan in place for employees. Call a group meeting or meet with staff one on one to let them know the reasons for the layoffs. Make sure that you allow time for your staff to communicate their concerns and ask questions. The Negative Consequences For Your Business Don’t forget that your laid off employees as well as those workers that remain in the workplace are the mouthpiece for your business. Your staff can be your best word of mouth advertising, or your worst nightmare. When you don’t treat your employees with respect and dignity; especially during difficult times, they won’t be shy about letting others know about how they were treated or, how their co-workers were treated. Their displeasure can be far reaching and viral as work related issues are often shared with their network of family and friends. Social networking sites such as “My Space” as well as blogs and other forums are popular avenues for current employees to “bad mouth” their employer and there is very little that you can do to stop them. Ways To Lessen Negative Impact You can lessen the impact of being laid off for your workers by giving them as much advance notice whenever possible that their job will be ending. Granted, advance notice may not always be the best approach based on your businesses’ needs and concerns but it is the ideal and sensitive approach. Easy Small Business HR 3
Treat the employee in an empathetic and respectful manner. Sit down with your employee and briefly summarize the business reason for the layoff. Be prepared to give them a memo that briefly outlines what happens next along with a packet that contains information on:
Their last day of work, (even if it is the same day).
The amount of money owed to the employee
Be prepared to give the employee their last paycheck if it is there last day if possible. (Some states may require this so check with your states’ Department of Labor).
If the employee has benefits, a summary of when those benefits end and who to contact with questions.
Let them know that the decision to lay them off was a difficult one. Make sure that you, or a designated staff member is available to answer any questions once they have had a chance to digest the information. If the employee is being laid off at some future date and is being given advanced notice, let them know that you will be flexible if they need to go on job interviews during the notice period. Proceeding respectfully and being transparent during a difficult time, will help make the transition easier for everyone involved.
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