In just the last month, unicorn startups like Ola and Quikr have reduced their headcount amid restructuring efforts. Earlier this month, American retail giant Walmart fired a third of its top executives across the country, and hotel chain OYO has laid off 2,400 employees and has more planned. Digital payments major Paytm is reportedly gearing up to lay off 500 employees, too. State-owned airline, Air India, which had already been defaulting on salaries, began contemplating layoffs. Established banks started handing out pink slips as well. There are signs of impending layoffs at telco majors Vodafone and Airtel, too. The entire Indian IT services industry is poised to let go of as many as 40,000 people by the end of March this year. Handling such layoffs tactfully is the need of the hour.
Layoffs are stressful for everyone involved. No matter how much you prepare, workforce transformations will always be a shock to organisational systems. The more an organisation is prepared to communicate, help employees find and transition to new jobs, and provide support to remaining employees, the lesser a toll the restructuring will take on individuals, company culture, and the employer brand.
It’s easy to point fingers when companies fall prey to tactical blunders—but it often happens with organisations that try to conduct layoffs without expert guidance and support from a qualified business partner. Among the pitfalls of delivering impact notifications is the tendency to be overly instructional to impacted employees and making excuses or promises you can’t keep.
Because “doing the right thing” by employees is often top of mind for small and medium business owners and managers, we’ve compiled a list of five ways to take care of your employees following an impact that won’t result in tactical errors:
During the time of letting go of employees, chances are, you’ve done everything else to reduce spending and cut costs across the business. Hence, it is of utmost importance to create a business case through which you can constantly communicate the purpose of the downsizing event at every phase of the process. This case should include sequential communication like notifications, general internal and external announcements, and notices to employees. Such a concise business case will help you to explain why a layoff was necessary without making excuses or laying blame within the organisation. When communication is transparent and consistent, employees are less likely to criticise your actions.
Managers and business leaders need to understand their role during an impact. In such a situation, partnering with a third-party outplacement service provider will help HR and functional leaders understand their roles and ensure that the messaging is consistent throughout the organisation. Even if you’re only going to let go of a few employees, manager notification training can help those who will be delivering the message understand the importance of following best practices and legal guidelines.
No matter which side of the layoff a person is on, it’s an emotional experience. Receiving training prior to the event helps your management team prepare emotionally for the event and deliver the message with empathy and understanding while remaining on message.
Everyone has distinct roles during an impact whether they are managers, human resource business partners (HRBPs), or benefit providers. A successful transition requires all groups to support employees in unison. Getting everyone together before the event will greatly help in building the synergy between leaders.
It’s normal to feel a wide range of emotions when facing a layoff. Sadness, guilt, fear, anxiety, confusion, cynicism, embarrassment, and resentment are all on the spectrum of normal. As we tell managers during manager notification training (MNT), it’s normal and expected that you would have an emotional reaction to the event. Acknowledge these feelings and try talking it out with other managers or HR professionals in the organisation. The more you can do to process and feel your own emotions prior to the event, the more empathetic you can act toward impacted and retained employees.
Enlist the heads of different departments such as HR, finance, legal and others as well as the heads of departments impacted by the reduction together and set up a team that is driven by a project manager. Outside the organisation, it is also wise to connect with legal counsel and employment attorneys who are experts in handling workforce reductions. Of course, you’ll want to have already established a partnership with a contemporary outplacement services provider who can provide the best high-tech and high-touch solutions. The size and scope of your external team should depend on the percentage and level of employees affected by the reduction.
When you communicate to employees news that they are going to be laid off, it is important to demonstrate empathy, care, and kindness. Express appreciation for what your employees have contributed to the team during their tenure but do not apologise for having to let them go. Take them through the business reasons for the impact and calmly, non-defensively reiterate the rationale for having to take this step. Most of all, lend a listening ear to your employees’ points of view.