As we head into the holiday season, most workplaces are buzzing with excitement. Between family gatherings, office get-togethers, and seasonal festivities, it’s an exciting time of year. As Andy Williams puts it, it’s the most wonderful time of the year. But even in the midst of celebration, businesses must stay focused on their bottom line. So, what should employers do if they find themselves facing the inevitable: involuntary workforce reductions?

Before you jump to the layoff as a final solution, ask yourself: have you done everything to avoid it? Ensuring you’ve done absolutely everything in your power to reduce costs in other areas is especially important during the holiday season. Simply put, it’s difficult timing for everyone.

Implement alternative cost-cutting measures

As part of end-of-year cost-cutting measures, be transparent with department leaders and communicate the importance of finding ways to trim expenditures. Before resorting to layoffs, try having contests to eliminate unnecessary expenses, or suggest virtual meetings to avoid travel costs. Perhaps you’re experiencing a redundancy issue that could be resolved if some employees left voluntarily or if some employees opt to take an early retirement path.

Assuming you’ve taken measures to eliminate extra costs, and the layoff is truly inevitable, your next step should be to approach the layoff with as much transparency and honesty as possible. If you’re letting employees go during the holiday season, you’ll want to do it with as much empathy and ease as possible.

If you’re letting employees go during the holiday season, you’ll want to do it with as much empathy and ease as possible. @EmilyM_Elder #SmartTalkHR @RiseSmart

Keep your company’s name off the naughty list by following these best practices for holiday layoffs:

It shouldn’t be a surprise

If you’ve truly gone to great lengths to avoid a layoff, the news shouldn't come as a surprise to employees. By the time you communicate about the involuntary reduction in workforce, employees should have been given ample opportunities to cut costs in other areas, from travel to frivolous departmental activities.

Once the announcement is made, continued communication is vital. The more you communicate about the reasoning behind the layoff, the process, next steps (for exiting and remaining employees), and your organization’s financial standing, the more likely employees are to trust your company and management team.

Timing is everything

It almost goes without saying: if you’re going to reduce your workforce during the holidays, there are certain days you should completely avoid, such as the days just before or just after Thanksgiving and Christmas. But beyond avoiding particular days, there may be better times around the end of the year to conduct layoffs than right at the holidays.

If you must cut the workforce before the end of the year, chances are that you know the layoff is coming before Christmas day. If possible, notify impacted employees in early December, or even late November and allow them to work through the month. Most employees are planning to purchase gifts, and the later you wait, the more likely they are to spend money they assume they’ll have. Announcing a layoff earlier in the holiday allows employees to use their remaining vacation days wisely and budget for a period of time with less income.

If possible, notify impacted employees in early December, or even late November and allow them to work through the month. @EmilyM_Elder #SmartTalkHR @RiseSmart

Announcing the layoff before the holiday season will also allow employees who might be expecting a holiday bonus ample time to control their spending. A poll by Accounting Principals found that 75% of companies planned to give bonuses in 2016, and the average of that bonus was estimated to be $1,081. Going without a holiday bonus could potentially limit gift-giving for some families. Keep in mind that timing doesn’t just affect exiting employees-- your remaining employees are likely to forego their bonus too, which brings me to my next point….

Skip the EOY bonus and extravagant holiday parties

Throwing an extravagant holiday party right after you’ve laid off some of your workforce will be viewed in poor taste. Similarly, handing out end of year bonuses can send a mixed message to remaining employees, who might wonder why the money wasn’t instead applied to retaining their former colleagues and friends.

Throwing a holiday party can be a strategic move to continue engaging and showing appreciation for remaining employees, but it’s a good idea to keep any celebrations low key. There are plenty of options that won’t break the bank. For example, you could host a potluck in the office, a white elephant gift exchange, or a cookie exchange. It’s important to bring employees, and even their families, together for the holidays, but avoid throwing an extravagant party until the company has recovered financially and the layoff is a distant memory.

Be More Flexible with Remaining Employees

It’s always tough for staying employees to watch their colleagues pack up their desks following a layoff, but it’s especially tough during the holiday season. Between the typical holiday lull and a layoff, it’s likely that remaining employees won’t get much done. Cut them some slack. Focus on starting off on the right foot in 2018.

One way you can make the transition slightly easier for remaining employees is by extending extra flexibility. Try loosening office hours leading up to the end of the year, especially as employees need to pick up last minute items at the store or prepare for a get-together. If your company policy allows it, perhaps suggest employees work from home a couple days to avoid the stress of a commute. They are going to be expected to take on extra work that exiting employees handled, but asking them to do too much, especially in the midst of the holiday season, might put remaining employees on the fast track to burnout. 

At the same time, your leadership team should be providing resiliency training to help managers and remaining employees transition through change as smoothly as possible.

Acknowledge there’s never a good time for a layoff

In the case of any workforce reduction, company leaders and managers should acknowledge that it’s never easy to make a decision to let employees go. During the holiday season, formally recognize, preferably in a face-to-face setting, that it’s an especially difficult time of year to make this difficult decision.

What you say and when you say it is extremely important during these difficult transitions. No matter what you communicate, communicate it with compassion. Tell employees why you appreciate what they have contributed. Thank them for their time, energy, and focus during their tenure at your company. Support your impacted employees by offering severance pay and outplacement services to assist employees in their job transitions. This will also help demonstrate to those remaining employees that you are a company that values the people who work/have worked for them.

While there’s never a good time for a layoff, HR and business leaders all know that sometimes it’s unavoidable. You’ll need to make the most of the situation by honest and transparent communications while ensuring your actions are aligned with your company’s values.

15 November 2017

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