Handling Layoffs during an Economic Crisis

Crisis During times of uncertainty, employees will be looking for your support more than ever before. As a leader, manager, or business owner, having open communication with your team is critical, and this becomes increasingly true during a global pandemic.

Crisis

Our Chief People Officer, Ashira Gobrin, has outlined best practices on how to communicate with your team during a crisis and advice on how to handle layoffs in a professional and empathic way.

How to effectively communicate during a crisis

Over-communication

It’s important to have a continuous communication approach as this situation continues to evolve. It’s important to keep your employees updated on the latest relevant news, but you must be cognizant of sharing information that is fact-based and helpful.

Individualization

Each of your employees is likely going through their own unique situations, therefore catering to their individual needs will be important. Start by having an open conversation with each of your team members to see how you can help them get acclimated to their new situation. Try as best you can to remain flexible in their new ways of working. If they need to alter their hours so they can balance their kids and work, it’s your job as a leader to accommodate them as best you can.

Be Optimistic and Realistic

It’s not always an easy task, but it’s important to keep your employee’s spirits up as much as you can in a time like this. While the news coming out of the world may not always be positive, you should strive to balance the negative news with the positive. Your job as a leader is to enable employees to continue as much as possible with their lives. Things will get better and you need to help people understand that.

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How to handle layoffs professionally and empathically

Running a company is all about hiring the best people and doing great work until you are suddenly faced with having incredibly difficult discussions with hard-working, loyal employees that you have treated like family. Laying off someone is never easy. Here are some tips you can use to be an empathetic human being in a really challenging moment.

Treat your people with dignity and respect

“I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” ― Maya Angelou.

Your employees may not remember why you had to lay them off but they will remember how they were treated. Unless you are dealing with a massive workforce, go out of your way to speak to each person individually. Doing mass layoffs with a group of people in a big room, on a telephone or video conference call, or an email is just not right. They deserve more than that from you.

Try everything else first

Before resorting to layoffs, consider all of the other options that you have to tighten your belt and save money. Your employees will appreciate that you thoughtfully pursued other options. You can consider first eliminating part-time and temporary staff or try to reduce every employees’ salary by 5%-20% depending on your situation.

If you do a 20% reduction, perhaps they can work on a 4-day week schedule. Many teams would prefer 80% of their salaries to keep their jobs. As you consider alternatives, talk to your key employees. They may have ideas that even you didn’t think about.

Remember that while this is hard for you, it’s even harder for the person involved

As best you can manage, you need to be empathetic, calm and focused. Preparation will make layoffs less painful for all. Chances are that if your company is experiencing problems, your employees are aware and probably worrying anyway. So, make the decision and do the necessary layoffs as soon as possible.

Legal: dot your i’s and cross your t’s

Speak with a qualified employment law attorney to make sure that your actions are legal, ethical, and compassionate. Although it will cost you money, a consultation with an attorney is recommended for anyone who is dealing with layoffs for the first time. Keep in mind that multiple state, federal, and international laws cover how an employer does layoffs. To stay legal and ethical, you need to know which applies to your situation. Getting this wrong can be an expensive mistake. Before you do layoffs, ask your attorney to help you create a severance package including a legal document that releases your company from liability for the employee to sign in return for the payout.

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Give them everything in writing

Hearing that you have lost a job is overwhelming at the best of times, and the employee will not likely retain any details. Provide everything to them in writing so that they can go home and review it all later. Include in the material:

  • What notice or pay in lieu of notice, including severance pay will you provide?
  • What will you cover with respect to benefits?
  • How will you help with government reporting for Employment Insurance where applicable?
  • Will you provide a job reference?

Be generous. More generous than you are legally obligated

When you determine the need for layoffs, do the best you can afford for your employees. On average, companies provide between 1 week and 1 month per year of service depending on various factors that make it easier or more difficult for the employee to replace their job with something similar.

If you know other companies that are hiring, or you have connections that may make it easier for the employee to find work, by all means, offer them up. Any and all assistance will be greatly appreciated.

Make certain your layoff practices do not discriminate

Be careful that you are not discriminating against any single group of employees and that the criteria for your selection are consistent. The group of people affected should be as diverse as your workforce is in age, race, gender, and any other minority classification.