With all the signs that recession is simply a ‘when’ rather than ‘if’ question, it’s hardly a surprise that we’ve started to see a huge surge in layoffs recently.
While there’s actually some debate about whether layoffs are really the quickest and easiest way to avert a company’s financial woes, the fact remains that January and February saw them happening in their droves. Microsoft, Google, Meta, Salesforce, Spotify, Amazon, Goldman Sachs, Wayfair and BlackRock were just some of the firms who have started 2023 in a cost-cutting vein – and no doubt more will follow.
But if there’s one topic that’s rarely discussed when it comes to layoffs, it’s the question of what is ‘right’ [rather than just the legally-compliant] way for HR to handle this unfortunate situation.
I would argue that if a company really has determined that job cuts are necessary, then two critical elements should still follow:
- Ensure those leaving the organization are treated with respect and empathy.
- Maintain morale and not lose the confidence of the retained workforce.
The first point matters because treating people respectfully is an inherently more ‘human’ approach.
Meanwhile, when it comes to the second point, research consistently tells us that improper layoffs have a highly corrosive impact of those who remain.
The anxiety, low morale and guilt that “layoff survivors” experience not only impacts engagement, but has been shown to hinder performance and motivation, reduce innovation and impact quality.
In fact, according to Harvard Business Review, one study recently found that a layoff affecting 1% of the workforce led to a 31% increase in the rate of voluntary turnover of the rest of the business.
So how can HR reduce headcount with empathy, while also maintain morale?
Here are five important considerations to keep in mind:
1) How you treat those who leave sends a strong signal to those who stay
In recent months, we’ve all seen news reports of employees who were unceremoniously let go then sharing the horrors of their experience – be it receiving no communication at all to just being simply locked out of their computers. In many cases, these organizations have experienced a wave of backlash and criticism that focused not on the layoff decision itself, but how it was handled.
How you treat those impacted during a layoff sends a strong message about the level of respect and care the organization has toward its employees. In turn, this can make or break trust with remaining employees, which is already on the decline in recent years.
As a result, you should always be objective and fair when making decisions — and whenever possible, provide outplacement services, severance packages or extended benefits to help mitigate some of the impacts. Communication is also paramount, which we’ll cover next.
2) Have a communication plan that focuses on transparency, consistency and empathy
While you may want to be silent and avoid tough conversations around layoffs, doing so may ultimately do more harm than good, and it can sever trust your your remaining employees. Before implementing layoffs, engage senior leaders, communications and other HR team members to develop a coordinated communications plan.
The first rule is to be transparent about what is happening. Often, executives announce layoffs via email or town halls with their teams. During these announcements, leaders should be clear about what’s happening, why and how certain decisions were made and what to expect. All of this needs doing with empathy; including acknowledging the emotions and impact the cuts will have on those affected. As a rule of thumb, never promise that there will be no future layoffs planned unless you’re 100% certain this is true.
Additionally, those impacted should be informed individually and in-person whenever possible. There are certain aspects of your body language, gestures and style that can’t be replicated over the phone and which helps to demonstrate compassion and empathy.
Preparing for these conversations is critical to ensure you’re clear on key messages to convey. It’s vital HR is prepped on how to answer tough questions and is armed with the answers to mitigate employee reactions.
Following the notification period, be mindful of how company actions might be perceived. For instance, if the following is being planned, ask yourself, “Is now really the right time for an elaborate, destination sales meeting?”
3) Equip leaders and managers to be active and visible
Amid chaos, employees tend to look to leaders and managers to set the tone, alleviate their anxieties and answer their questions. This can be challenging, as often during times of change, leaders and managers are simultaneously grappling with their own emotions – and may want to hide or “defer” communications to others.
Consider how you can equip leaders and managers with messaging that helps them explain the decision and rationale with their teams. You should also anticipate tough questions and provide answers that help drive consistency and clarity across the organization.
If you are presented with a question you don’t know how to answer, say so. Let employees know you’ll follow up and get back to them versus sharing potentially false or misleading information.
And don’t hide. Being visible and available is key.
Leaders and managers should consider hosting frequent team meetings, leading by walking around and holding regular 1:1’s with direct reports. Reinforcing team priorities is also a great way to keep teams focused and motivated toward things that are within their control.
4) Allow time for surviving employees to cope:
Research shows that layoff survivors experienced a 41% decline in job satisfaction, as well as a 36% decline in organizational commitment and a 20% decline in job performance following events. “Layoff survivor guilt” as it’s been coined is real – so how do you help teams through it?
One of the first things you can do is leave time and space to actively listen to employees’ concerns.
Set up individual meetings just to check-in and see how teams are doing. While you may need to reinforce the rationale behind the decisions, the bulk of your time should be spent actively listening.
Even though you might not be able to answer all their questions, or anticipate what the future might bring, you can help your team focus on what is known.
Consider hosting quick, 15-minute daily check-ins with your team to align on weekly deliverables, highlight accomplishments and maintain focus.
You may also want to take time to redefine employees’ short-term priorities, to ensure everyone is clear on their responsibilities.
A survey by BizReport found that 66% of those who’ve survived a layoff reported feeling overworked following job cuts. To prevent burnout, identify activities that can be put on the backburner during this time and agree on specific goals for each person.
5) Outline a clear path forward and maintain confidence in the future:
During times of change, people crave certainty. Following mass layoffs, leaders need to outline a realistic path forward and vision for the future.
Employees want to feel confident that executives have a plan to stabilize the organization and position it for future success. If employees can’t see themselves in the future organization, chances are they’ll begin looking for opportunities elsewhere.
The reality is that layoffs are never desired or easy.
But as leaders, one golden rule should always be your guide – treat people how you would want to be treated.
How you choose to handle and manage layoffs will have long-term implications to the success of your business, your ability to retain high-performers and your reputation with customers, previous employees and prospective talent alike.