How can you make layoffs less painful for employees?
Layoffs can be painful for employees being laid off and can be devastating regardless of the position or designation the employees occupy. There’s a stark difference between laying off people on a large scale, hanging them out to dry, and letting them cope with it by themselves, and the other method of being with them throughout, and ensuring they’re taken care of until the day they find another job.
This blog takes you through how you can make layoffs less painful for employees and how to give them a soft landing.
Signs your employees know layoff is on the horizon
- There’s a dreadful silence in the office
- They notice that closed-door meetings have increased
- They see others job hunting and are starting to look at other jobs themselves
- Leaders aren’t available as they were before
- They notice that things that were urgent before aren’t now
- Low employee engagement
- Dropping innovation
- You’re receiving a bad reputation on job boards and review pages
Case studies of layoffs done right vs wrong
Did you know that companies that laid off employees underperformed companies that didn’t? The time you take to recover from layoffs can be longer. Here are examples of companies that laid off right and some that went haywire.
Elon Musk took the company private and imposed a 50% layoff on the company. It means 1 out of every 2 people. People didn’t know how the impact would be, but it was a severe blow to all employees, which has decreased trust since then.
Fidelity Investments
Fidelity Investments did a 10% cut across the board. Six weeks later, they called the laid-off people back to the company, saying that the market had recovered, and the company needed them. Not many people took it up.
Sandra Sucher, a Harvard Business School professor who has been studying layoffs for 15 years says, “It’s incongruous to call people back after you’ve let them go. It’s rude to say that we made this mistake, we know you felt there wasn’t support for you or your family, but now we want you back.”
The trick is to lay off people so well and empathetically, that they come back to you if you need them.
Nokia
When Nokia was competed by Apple and Android, Nokia had no other choice but to close down the majority of its operations. They had to lay off 18,000 people across 13 countries in 2 years. Nokia arrived at a metric to determine if the layoff was successful – they wanted to check the % of people who knew their next job the day left the company. They offered funding for entrepreneurial employees who wanted to start a new venture, and sponsored courses for those who wanted to educate themselves. The company showed sheer commitment to helping its employees.
Stripe
Stripe did a 14% employee cut across the board, and it was a tough decision for the management and its employees. Their CEO, Patrick Collison, publicly praised people who were let go and appreciated them for their talent, and incredible performance while they were working with Stripe. When you go the extra mile to give your employees a soft landing, they feel confident to apply to and appear for interviews, knowing they won’t be frowned upon when they explain the career gap in their resume. It changes the public perception.
Tips to make layoffs empathetic
Deliberate who you let go
Choosing who to lay off is a big decision. And, it has to be done by the manager and HR together. Spend time deliberating on the list and make sure you’ve considered multiple reasons to not let them go. It’s easy for managers to let their biases influence who to lay off.
If you’ve seen employees with consistently low grades, put them under observation, and have a 1:1 candid conversation about what’s ailing them. Ask them about their mental health, physical health, family issues, etc, and find out where they need support the most. Most managers are very task-oriented, so by joining forces with them, you can offer a soft landing to the employees being laid off. If the employee isn’t able to achieve even 60-80% of their goals as per their performance improvement plan, it’s time to let them go.
PandiMeena, a Senior Human Resource Business Partner at a renowned IT company says, “When the manager gives you a set of names to lay off, check the intention of the manager to let the people go, check the quality score from customer teams, escalations from internal and external customer, absenteeism, and punctuality records, and background checks, if necessary.”
Based on their progress, and records if you choose to terminate the contract, it’s time to get separation procedures in order.
Provide a soft landing
If you’re laying off someone because of performance issues, go into the final termination call fully prepared, along with the employee’s manager.
PandiMeena says, “Make sure the manager doesn’t throw down criticisms and bad feedback on the employee. Try to put a positive connotation on the PIP, and let them know you’ll be there throughout the transition for them.”
People on the receiving end of the news can break down crying, hold a grudge with you, yell at you, or go quiet on a downward spiral.
Sandra Sucher says, “Trust is the willingness to be vulnerable. During layoffs, the trust employee has in the organization is broken. Although most layoffs are a result of business decisions, it still feels personal. That’s why you need to give a soft landing.”
Giving a severance package only is like throwing money at the problem. Have a heart-to-heart conversation with them, and ask them what they’d want to transition from this job to the next – it can be counseling sessions for themselves and family, health benefits, etc. Give an advance notice to them.
If you have some notice period from the time you announce the layoff till the time you let them go, offer everything you can, and ask if they still want to work for you in the interim. Nokia did that and the company sold more new products than before, maintained a good reputation for the business, and maintained a stable product quality.
Vouch for the employees’ credibility
Being laid off is an assault on your identity because not everyone is laid off. So, the natural question that pops up in everyone’s minds is ‘Why was I on the list, and not others?”. This is why self-esteem takes a huge hit. This is only aggravated by the interviews they attend where they’re asked the same question. Vouch for the employee’s credibility in the separation email you write, in the letter of recommendation you pen down for them, and in any medium possible, so that it’s made public, and their competence and professionalism aren’t questioned.
Acknowledge the impact of layoffs
Dedication, commitment, and innovation take a dive during and after layoffs. You need strong wellbeing measures in place that boost psychological safety, to slowly recover from layoffs. Take time to interact with your retained employees individually and as a group. Now’s a great time for leadership to have heart-to-hearts with their workforce.
Help in outplacement
If you’re planning to let go a massive number of people as part of your merger/acquisition, or major business restructuring, search for productivity, and natural attrition, you need to plan how these people and their families are going to withstand the blow. There are instances where HR managers, with permission from the board, arrange for outplacement services in the form of in-house job fairs, etc.
Harikrishnan Pratap, a senior management consultant and ex-Vice President HR of Athenahealth and DXC says, “Be objective as much as possible. If there’s a mismatch between your company’s core values and the individual’s attributes, it’s difficult to find a middle ground. If you’re letting them go, clearly state that it’s a business decision and that you’d help them after the layoff. Give them job referrals, counseling support, and references, and recommend them to suitable opportunities.”
How can Manah help?
Counseling for people who have been laid off is extremely important to make sure their self-esteem doesn’t take a big hit, and to help ground themselves. Emotions at such life-altering moments come and go in stages. It’s essential to have a professional help you at these stages. That’s where Manah Wellness can help.
Our free 24/7 helpline is answered by expert psychologists who are proficient in multiple languages and are available round the clock for help. You can also avail counseling sessions to talk through the burden of having to let go of people you worked with. Manah’s team of psychologists will help you take care of your wellbeing as you navigate through this difficult time.
