How To Manage a Layoff Without Ruining your Reputation

BY Kathy Crosett
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Managing a layoff may be one of the worst tasks you’ll have to experience in your career. While George Clooney was able to pull off his role as a corporate henchman in the movie "Up In The Air," most managers would rather not have to lay off employees. If the event is sizeable, you’ll need to adhere to the rules of the Worker Adjustment and Retaining Notification (WARN) Act. While that covers your legal responsibilities, too many business leaders discount the emotional distress they and their severed employees will experience during the layoff process. These events can leave deep scars, but you can employ a few tactics to ease the pain.

How Not to Manage a Layoff

We’ve all heard the layoff horror stories. Back in the day, companies managed large layoffs by having security guards greet employees in the corporate parking lot as the workday started. Instead of going to their offices as usual, the employees were escorted into the building to gather personal belongings. Following that distressing experience, company representatives informed employees they’d receive an email regarding next steps, such as severance, final paycheck, outsourcing assistance, and insurance coverage.

Employees don’t appreciate this kind of treatment. A JobSage survey indicates one of the top three experiences employees didn’t like was being ushered from the building by a guard. It won’t take them long to post negative comments on sites like Glassdoor. That kind of public animosity toward your organization will make it difficult to recruit top talent once you’re hiring again. To avoid these issues, plan your layoff carefully.

The Best Layoff Process

There’s little question that employees fear being laid off. The generally gloomy economic news has people worried. In addition, this year, big name employers ranging from Wayfair and Gap to Peloton and Coinbase have reduced headcount.

Some of these layoff experiences didn’t meet employee expectations. JobSage reports that terminated team members:

  • Lost their jobs at an important time (such as right before a holiday) 32%
  • Were not given a chance to ask questions 21%
  • Felt nobody cared about them during the process 35%

Surveyed employees reported that their manager handled the layoff only 57% of the time, while in other cases, human resources (22%) and upper management (18%) delivered the news.  When it comes to asking questions, employees would like a private one-​on-​one meeting with their manager to review what’s happening. In particular, “they want to be recognized for their contributions to the company by being treated with respect.”

That demand can be challenging for a manager who’s struggling to maintain their composure during the process. But staying professional as you give employees the bad news will work in your favor and maintain the company’s reputation for the long term. Showing empathy can be hard for managers. If your psychometric assessments indicate you naturally fall short in this area, remind yourself to listen to employees during these difficult discussions.

In addition, 77% of employees prefer to be given the bad news in person. This demand may be challenging to meet. You may not have a corporate office. Or your employees may have insisted on working from remote locations. If you’ve been operating as a remote business, communicate the news through a one-​on-​one virtual meeting and allow time for questions.

What Employees Expect During a Layoff

Once your team members process the bad news, they’ll want to know what they can expect from your company. Only 27% of recently laid-​off employees receive severance. Those packages ranged from eight to 11 weeks of pay. If you’re not able to offer severance, know that employees want information and assistance with health insurance coverage. On a scale of one to five, employees ranked the desire for a health insurance stipend at 4.07.

The JobSage survey reveals that some industries do a better job than others in handling layoffs. “The industries ranking the worst at layoffs include advertising and media (83%), hospitality (79%) and engineering (74%).” If you anticipate needing to reduce headcount in the near future, keep this information in mind. Knowing how to manage a layoff compassionately signals that you’re empathetic with your employees’ situation. And if you try to help them in their future endeavors, you can minimize the damage to your personal and corporate reputation.

Photo by Redd on Unsplash