HR Focus, October 2008
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HR Focus
October 2008
SECTION: HUMAN RESOURCES Vol. 2008 No. 10
HEADLINE: Dos and Don'ts for Layoffs
BODY:
If layoffs become a necessity, what your organization does--and does not do--can mean the difference between minimal challenges and maximum fallout.
To help your organization to cope, consider these dos and don'ts, suggested by interviews with human resources and legal experts:
Do be rational and reasonable. While there may not be a "good" layoff, employment analysts say, a better layoff is possible if a company approaches the downsizing rationally, communicates effectively and early, supports managers conducting the job cuts, offers counseling and training for laid-off employees and their families (if necessary), and invests abundantly in the remaining workers.
"Companies are so afraid of lawsuits about favoritism that instead of creating a logical plan having to do with merit, competence, or need, what they do is the great 'fairness' thing, which is typically the first-in, first-out system," said ArLyne Diamond, founder of Diamond Associates, a management consulting firm in Santa Clara, Calif.
"They penalize some very good people, and since the rumor mill always knows what's going on ahead of time, the best people leave early and get other jobs," said Diamond.
Do be forthcoming about where you must cut. Employers should be up front about where job cuts will occur, Diamond said, to avoid unwanted attrition. Moreover, management should announce that there are some critical areas where there will not be layoffs--if this is the case--and explain the situation as early as possible, she said.
Do obtain input from divisions or other offices about reductions. Patrick M. Wright, director of the Cornell University Center for Advanced Human Resource Studies in Ithaca, N.Y., said that corporate headquarters is not always the best place to decide which jobs to cut.
"I think one way to think about it--instead of talking about numbers of jobs to cut--is to think about a reduction in labor costs," Wright said. "Let companies or business units figure out how they're going to achieve that reduction."
Do provide resources to terminated workers. If your organization can help with the job hunt or other resources, provide these, Diamond said.
Do support the managers who must do the firing. Terminating employees is one of the most stressful things a manager has to do. Diamond recommended counseling for managers conducting the layoffs. They have the burden of knowing that the layoffs will cause "great financial and emotional pain, sometimes people losing their homes," she said.
Do remember and support the "survivors." Those whose jobs are spared the layoff will feel the stress of guilt and perhaps of more work to make up for the reduced workforce, noted Laura Crawshaw, founder of Executive Insight Development Group Inc. in Portland, Ore.
If the organization has not communicated in advance about job cuts and treated exiting employees with the utmost humaneness, the remaining employees "will also be fearing that the next knock on the door" will be announcing a layoff for them.
Don't let fairness get in the way of the right action for the organization's survival. It may be better to focus cuts in certain areas, rather than across the board. Your organization could be harmed as a result, pointed out Wright. He said there can be a false sense of justice at play in such layoffs.
Don't make arbitrary cuts. Most employers only lay off workers if it appears that they absolutely must do so.
"Where a layoff doesn't make good sense is when companies do it only because their competitors are doing it or they're trying to reassure investors that they're taking some tangible action to show Wall Street that they're doing something," said author and University of Colorado business professor, Wayne Cascio. Unfortunately, he said, "it happens a lot."
Don't treat departing employees like thieves. Escorting terminated employees out of the building at the time of termination because of an excess fear of security breaches is a mistake, Diamond said. "You need to treat people with care, respect, and dignity."`
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Sidebar: Termination Resources
"Avoiding the Legal Minefields of Terminations: What HR Needs to Know," IOMA audio conference, Oct. 16. For more information, visit www.ioma.com/hr
Termination Toolkit, including information on applicable laws, sample forms, and sample policies, SHRM (www.shrm.org)
The Employment Termination Source Book: A Collection of Practical Samples, by Wendy Bliss and Gene Thornton (SHRM, 2006)
The Hiring and Firing Question and Answer Book, by Paul Falcone (Amacom, 2006)
Negotiating and Drafting Employment Agreements: Leading Lawyers on Terms of Employment, Restrictive Covenants, Termination Provisions, and Other Key Elements, by multiple contributors (Aspatore Books, 2008)
Leading After a Layoff: Five Proven Steps to Quickly Reignite Your Team's Productivity, by Ray Salemi (Adams Media Corp., 2005)
Survivors: How to Keep Your Best People on Board After Downsizing, by Gayle Caplan (Davies-Black Publishing, 1997)
Sidebar: Termination Resources
LOAD-DATE: September 16, 2008
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