The unthinkable has happened. Increased industry turbulence and
recent commission cuts have forced your company to reevaluate its
staffing needs.
Perhaps you have concluded you have to downsize. How do you
treat departing employees fairly (so they won't bad-mouth you
wherever they go)? How do you break the news to remaining employees
(so morale won't bottom out)? How do you notify customers, vendors
and other associates (to avoid a misperception that your firm is
going under)?
The answer is you use the layoff to rearticulate your corporate
culture, demonstrating that yours is an empathetic, people-oriented
business. This is accomplished with a thorough, well-crafted
plan.
Keep It Confidential
When it becomes evident that you have no alternatives besides a
layoff, create a strategic plan. You may want to bring in a
consultant to make certain that you have clear, consistent
communications and are protected against legal liabilities. Check
with regulatory agencies and benefits providers. Review any
employment contracts you may have in place.
Above all, do these things in total secrecy, so that your
integrity will not be compromised before you're ready to act.
Be careful how you decide which individuals will be cut. Have a
set of criteria so it doesn't look arbitrary, as if you're merely
getting rid of unpopular staff members. You are eliminating
positions, and that is easier to justify than eliminating
people.
In a good plan, you will address three main interest groups:
departing employees, remaining employees and customers. We'll take
them each in turn.
Breaking Bad News
"I felt like I was run over by a truck." This is how people
everywhere describe being laid off. Regardless of their
self-esteem, how well they liked their job or whether they really
felt ready for new opportunities, losing a job is one of the most
painful experiences a person will ever endure.
The layoff interview itself is indelibly engraved in memory.
An overwhelming sense of grief descends, accompanied by feelings
of rejection, abandonment and self-doubt. The person goes through
the stages of mourning typical after a death. It can take months or
even years to recover.
So be very careful when conducting the layoff interview. If your
company is small, the president or owner should do the interview.
In a larger firm, the immediate supervisor is the best choice.
Have a script prepared, with every point covered in detail.
Otherwise, it's easy to forget important points in the emotion of
the moment, or misrepresent the company's position (potentially
leading to serious legal complications).
Explain severance pay, continued benefits coverage and other
options open to the employee during the layoff interview. Go over
whatever resources are being offered, such as job retraining and
resume-writing services.
Many larger firms hire an outplacement agency, which can provide
everything from a two-hour on-site seminar to individualized
counseling for senior-level personnel. If you cannot afford an
agency, you can still give effective and thoughtful support with
letters of recommendation and networking information.
The employee should be asked to leave immediately after the
interview, and the supervisor should oversee every step of the
departure. With the sophisticated electronic devices in the travel
industry today, files can be deleted and other forms of high-tech
sabotage can occur in just a minute or two. Also, without a
supervisor on hand, the employee is likely to talk to office mates,
spreading anger, confusion and fear.
Despite the security measures, be as tactful as possible during
the departure. Appreciate how humiliating it is to have someone
watch as you clean out personal belongings in a desk, and be
mindful of your part in a serious human drama.
Damage Control
The people in your firm who are not laid off also will grieve when
their coworkers depart. They'll feel insecure about their own
future with the company. They'll miss friendships and worry about
taking over the additional workload. They'll feel embarrassed when
talking with customers. It's therefore no surprise that
productivity and morale often bottom out right after a staff
cut.
Communicate directly with your staff about the layoff. Explain
why it was unavoidable and how it will help ensure the company's
future. Assuage fears about more layoffs (which is why you should
make one clean sweep instead of dragging out the process over
time).
Let everyone know about the layoff at once using a formal
mechanism, preferably through a companywide meeting or a memo
distributed to all employees. E-mail is much too impersonal for a
general announcement, but can be used for follow-up
information.
Prove you share your employees' sorrow by spending time with
them, wandering around the office and reassuring them that things
will be OK. Your goal is to demonstrate how deeply you care about
people - current and former employees alike - by behaving
ethically, fairly and compassionately.
Outsiders' View
As part of your employee communications program, give specific
instructions about how to tell customers, suppliers and vendors
about the layoff.
Create a "cheat sheet" to be kept by the telephone, so every
staff member will be prepared to handle questions gracefully. Put a
positive "spin" on the message, so callers will not think the
business is in jeopardy. And warn employees against gossiping with
outsiders; emphasize the importance of maintaining team spirit.
If accounts have been reassigned, advise the new agent, rep or
salesperson how to notify everyone involved. Key accounts deserve a
phone call, personalized note or even a lunch meeting to introduce
and transfer loyalties to a new agent. You may want to draft a
generic letter explaining the situation, which account reps can
customize as they contact customers.
A layoff is a gut-wrenching experience for everyone concerned.
It's also an increasingly common part of the corporate landscape
today. So acknowledge the personal angst you will feel, regardless
of your role in the layoff.
Then assess how you can use the experience to strengthen your
corporate culture - managing this (like all other necessary
changes) to maximize the human potential within your
organization.
Susan Gibson is president of the Gibson Group, a management
consulting firm in Bellevue, Wash., specializing in employee
training, organizational development and service and quality
assessment.
***
10 Tips for Easing the Pain
1. Use the Golden Rule. Imagine how you'd want to be treated
during a layoff, and act accordingly.
2. Do it all at once. Figure out who needs to go, and have a
single layoff day.
3. Focus on feelings. Although layoffs usually take place to
improve the bottom line, they have a human cost, which should never
be ignored.
4. Don't pinch pennies. Spend whatever is necessary to do the
layoff right. It will pay off in the long run.
5. Avoid lawsuits. It only takes one to totally destroy your
company.
6. Don't take it personally. People who lose their jobs get
angry, and they need a target. If you're the boss, it'll be
you.
7. Keep the faith. Everyone else will be questioning your
company's future. You can't afford to.
8. Talk to people. Be accessible to staff, so that your shared
emotions create new bonds of trust and understanding.
9. Allow a little slack. Give people time to adjust, and expect
a temporary drop in productivity as duties are reassigned.
10. Keep everyone reasonably happy. The more content you can
keep former and current staff, the better your chances of
post-layoff success.