There’s no doubt that the economic crisis has now made its way round the globe. Recent decisions by large companies to close plants and cut thousands of jobs worldwide have only confirmed this.
Likewise, you or your company might also be facing the dilemma of needing to reduce staff numbers in order to survive. But how do you actually go about telling staff that they are going to be laid off?
As an employer or manager, your actions – before, during and after a round of layoffs – can have a lasting impact on the self-esteem of the affected, the morale of your remaining workforce and the success of your business. Ensure corporate responsibility with these dos and don’ts:
Do make sure all avenues have been explored
Considering that the cost of replacing a valuable employee is high – 30 to 250 percent of an annual salary, according to some calculations – you shouldn’t underestimate the importance of holding on to good employees.
So explore all the possibilities for avoiding redundancies, such as modifying hours or transferring job roles. Solicit feedback from your employees. Some may opt for voluntary retirement while others might welcome the opportunity to share jobs or reduce their hours.
Do have a downsizing strategy
Start by doing a thorough assessment of your business. Identify the activities that bring your business the best results. Then focus on cuts to protect this core business. Many companies react by making across-the-board cuts because they think it is the fairest and simplest way. But this can hurt the company in the end. Careful planning and a systematic approach is the way to ensure that downsizing brings the desired effect – and results in long-term business gains.
Don’t downplay the seriousness of the situation or make false promises
No one wants to be the last to find out that their job might be in danger. Or be told that it isn’t in danger – and then learn otherwise. Treat your employees with honesty and dignity: disclose how the business is doing, how the company plans to respond and how this could affect them. They will respect the truth more, and your honesty will encourage them to do their part for the success of the company.
Don’t hide behind e-mail
This is a tough time for everyone and can be particularly painful for managers and decision makers. You may want to minimise bad feelings by minimising contact. But don’t hide in your office and behind e-mails: this may send the message that you are cold or uncaring.
Instead, be courageous and open, meet with employees face to face, show your concern and compassion, offer whatever support you can – whether it’s help transitioning or time to find new jobs. How you, as a leader, behave in this awkward and stressful time has important consequences for the morale and confidence of your employees – both those who leave and those who stay.
Do be prepared for an emotional response
Getting laid off can be traumatic, not only in terms of the loss in income, but to employees’ self-esteem. In addition, those who stay may suffer from feelings of guilt, depression and anxiety. Don’t downplay these emotions. Allow people to express themselves, bring in a therapist to help deal with the trauma or create a support group where employees can share their feelings.
It is common that after a round of redundancies productivity and morale drops. To help regain lost momentum and keep your company moving in the right direction, it is important that you stay positive and think strategically. Rather than simply redistributing the extra work among your remaining employees, look at ways to restructure job roles and duties so that you make the best use of your talent. After all, a new challenge can be a very positive motivator.