Today, layoffs are the default response to problems created by global competition and technological advances. But, unfortunately, many organizations never achieve the intended goals of the job cuts. That's because a combination of bad publicity, increased voluntary turnover, and weakened employee engagement caused by rushed or badly handled layoffs can outshine the cost savings. But if an organization has a system for managing job cuts properly, it can streamline the process to allow restructuring with minimal impact on its reputation and remaining employees.
The job market is evolving rapidly, with automation and fierce competition forcing companies to rethink their workforce strategies. Aside from the inhibited growth caused by the pandemic, inflation and recession are leading to episodic restructuring and routine job cuts in many companies.
Nobody wants to think about massive downsizing, but the fallout from the pandemic, plus the recession makes it harder for businesses to survive. The economic situation and soaring global inflation demand vigilance, and business leaders should consider exit strategies. You need an exit plan in case layoffs are a necessary measure for your company to stay afloat. Sometimes, layoffs are sudden, and you may not have enough time to prepare an adequate exit plan for workers. Mistakes when making job cuts can cause a public relations crisis, legal disputes, and potential fines.
A study by Randstad Risesmart found that 54 percent of companies did not have plans to cushion employees during layoffs. Despite this, economic downturns can quickly drive them to downsize. A company with a good workforce management plan includes everything from onboarding to exiting team members. In addition, some exit programs include outplacement support services and employee assistance programs. Offering outplacement support is a worthwhile investment in the company's reputation.
Despite recovery from the pandemic in some regions, hard-hit organizations still struggle to work at full capacity. That means unemployment is likely to increase. If your company offers a fallback plan to assist employees, it eases the pain of job loss. Explore why organizations should plan for layoffs and how an exit plan helps employees.
preserving your hiring reputation
Employee experience is vital in companies and can affect their brand. Unfortunately, some companies treat their employees well during recruitment and onboarding and disregard their needs as they leave. This is a major oversight.
Your practices during hiring, the duration of an employee's tenure, and exiting, shape their experience, but critically their view as alumni. This Cone Communications study discovered that 64 percent of millennials are searching for careers with a purpose and won't take a role in a company that doesn't have corporate social responsibility. That's a good reason for your organization to create a culture that promotes a good employee experience.
Despite the negative press your company could receive for massive layoffs, providing a robust severance package can save your reputation.
A good severance package displays your compassion and genuine care for the laid-off workers. If your exit package includes an outplacement support service, it shows you value your employees and appreciate their efforts in the company. You are effectively saying you want them to land well and find a new job quicker than by their own means. The outgoing employees should remember how well you treated them and could well be great company ambassadors.
When you treat an outgoing employee with dignity, it positively reflects the employer brand. The remaining employees are also happier when their colleagues are offered support. It is good for morale and improves productivity. Besides, economic downturns are temporary, and your company is likely to expand when the market is favorable. The brand reputation you built during the layoffs will follow you into the recruitment process. When you treat employees well, your company becomes an employer of choice, and you can attract the best talent. Hence, your investment in outplacement support will pay off by motivating your current workforce and boosting your hiring reputation. Dismissing employees without due care during layoffs always comes back to bite you.
Negative layoff experiences are usually shared on social media and company review sites. That means your company risks receiving negative ratings from job review sites. Those negative reviews remain available for future job seekers to read. You risk missing out on great talent because of a poor exit strategy. Even long after you have improved your outplacement support plan, those negative reviews are still available online.
departing employees need support
The hiring environment is pretty competitive. Workers who haven't been in the job market for years will struggle to navigate it. As a manager, put yourself in the employees' position and consider the stress associated with a layoff. Finding employees an outplacement support program reduces the damaging effects of losing a job. Outplacement support can offer workers guidance in using the latest job search techniques, helping them discover new ways to effectively display their skills and capabilities.
Laid-off workers face various challenges when joining the job market. For instance, some of their skills may be redundant in the current employment climate. That means they may need to focus on their transferrable skills and apply for other roles. Sometimes, they must improve their skills and take courses to qualify for adjacent roles or consider switching industries. All these options are overwhelming for someone still smarting from losing their source of income.
Outplacement support allows laid-off workers to work with career coaches individually to explore their career development possibilities. A career coach helps them determine personal goals and create a roadmap for achieving them. Some employees may opt to change industries, and coaching can help them choose the industries where their skills would be valued. With the gig economy expanding, a career coach can help your outgoing workers build a professional portfolio and offer consultancy services.
Some job openings also provide remote work options, and job seekers should be attuned to opportunities in diverse geographical locations. Outplacement support offers networking opportunities and connects outgoing employees to job placement agencies to speed up their career transition. If the employees plan to work virtually, they must learn job search skills for remote work and interview preparation for virtual opportunities.
what does effective outplacement look like?
Outplacement support is a vital part of the employee transition program and should include the following elements:
- professional career transition coaching: an effective outplacement service should provide career transition coaching services. Each outgoing employee is partnered with a career coach to help them assess their skills and career interest. A career coach should be chosen based on their functional and industry experience to ensure the assistance they provide to workers is of specific benefit. A career coach works with outgoing employees to help them explore their experiences and passions and use them for marketing themselves. Other roles of a coach involve assisting outgoing employees in developing a job search strategy and guiding them in salary negotiations. A career coach also provides ongoing support and positive reinforcement during the job search process. As a manager, you should ensure the outplacement service provider offers the best coaching services to guide employees through the transition process.
- updated resume and professional brand: a reliable outplacement partner should assist your outgoing employees in building a professional brand. Employees will get help customizing their resumes and cover letters to match the job requirements. An updated and professionally written CV improves their chances of landing a job. Besides, building a professional brand and optimizing social media sites like LinkedIn conveys consistency and professionalism, enhancing a job seeker's hiring prospects. Working with outplacement partners also helps job seekers create compelling and keyword-optimized job applications that are recognized by applicant tracking systems.
- networking opportunities: outplacement support providers usually offer inclusive services that include networking opportunities for job seekers. The networking sessions are matched up accurately with the employees' industry and experience. That means they can make good connections in their industry and boost their job search. Outplacement service providers can also connect job seekers to networking opportunities through virtual job fairs and access to recruiters. Some outplacement support services have contact discovery engines that enable job seekers to identify people in their industry. The alum network of the outplacement provider can also provide valuable connections for job searches.
- highly matched and relevant job leads: outplacement providers have diverse ways of matching job seekers to jobs. Since transitioning employees aren't aware of all the available opportunities, a provider with an expert career concierge can minimize the need to search through many listings. Dedicated outplacement providers take support to the next level by offering matched and ranked job opportunities to help job seekers narrow and focus their search. Working with a global outplacement company is also helpful in matching job seekers with diverse opportunities in different job locations.
- resources and tools to boost job search: outplacement providers offer diverse e-learning tools and resources to assist transitioning employees with the career transition. For instance, e-learning resources are available for preparing for interviews, negotiating salaries, and outreach activities. Job seekers can use the assessment tools to identify their skills, conduct a market analysis and find information relevant to their job search. Outgoing employees can also access videos, webinars, podcasts, and workshops to help them learn the best job search practices.
- skilling and reskilling courses: an effective outplacement support provider should analyze the participant's skills and provide a skill gap analysis. When they identify a need to reskill or upskill, they should provide a plan to enable program participants to improve their skills. Some outplacement providers have resources and courses to help with career development. Program participants can also receive assistance with developing a learning plan and gradually improving their skills.
Even in the post-pandemic economy, outplacement service providers should offer virtual services. While some coaching sessions and group activities can be conducted in person, e-learning tools should be available online.
managing and communicating layoffs appropriately
Therefore, the management of layoffs needs to be approached cautiously and with clear, transparent communication. Below are some of the steps for managing and communicating layoffs in a responsible and empathetic manner:
- assemble a team: the layoff process begins by assembling a team to conduct the redundancy process from start to finish. The team will help you streamline the layoff process. Using a team to determine the redundancy criteria and the employees affected by the layoffs reduces adverse impact. Documenting the factors used to determine which employees to lay off is critical. For instance, if you rely on performance review scores, ensure the employee documentation is accurate and up to date.
- ensure legal compliance: companies need a redundancy or layoff policy to guide the process. If the redundancy wasn't necessary, an employee could sue. During layoffs, the organizations can maintain legal compliance and reduce the repercussions from lawsuits due to unlawful terminations. Any issues that may cause adverse impacts should be addressed during the planning stage. It is also important to make a case for the layoffs and document it.
- develop a communication plan: layoffs require regular and clear communication with the workforce to avoid creating anxiety. When notifying the employees affected by the layoffs, ensure you communicate with transparency and compassion. Layoffs are emotional and stressful, and you need to be empathetic and supportive. A good communication strategy helps build trust among the remaining workers. Departing employers also feel more satisfied when they are let go with dignity.
- ensure consistent communication throughout: Don’t hurt your credibility by giving different information to different audiences. Be consistent, whether you are talking with employees, the media, investors, the local community or other audiences.
- severance package: leaders and HR managers must explain the benefits available to outgoing employees. For instance, if you provide a severance package, explain the amount and how the company arrived at the figure. Ensure outgoing employees access an outplacement support service provider and understand how to utilize their services. Any other benefits like healthcare should also be provided.
who to inform and when
- Executives - from the start.
- Involved HR, Legal, and Finance - 60 days prior.
- Involved IT, Comms, and Selectors (leaders who select people to be laid off) - 30 days prior.
- Messengers (managers who will inform affected employees) and "Back-up Team" (People that will be providing support to Messengers on the day / involve ~5 days prior- 5 days prior.
- Senior leadership not yet informed - the afternoon before.
- Managers not yet informed - the morning of before individual conversations.
- All staff - all-staff meeting after individual conversations.
- Impacted employees - The day of layoffs. Allow approximately 15 minutes per conversation. Try to get all discussions done in the morning if possible.
- All employees. Day of layoffs. Try to get all staff together in one meeting.
- Those outside of your organization on an as-needed basis. If you are part of a large organization or it's a large-scale layoff, it's a good idea to have a standby statement ready for customers and the media. If you're a publicly-traded company, consult with your investor relations team because regulatory considerations and materiality will impact timing and sequencing.
Finally, in the event of a layoff, you may see negative comments from outgoing employees and those trying to quickly look for a new role. Unless materially damaging and untrue, you should not try to co-ordinate or direct the social media posts of affected employees.
A layoff requires careful planning to ensure legal compliance and the fair treatment of all workers. Employers need a good plan before, during, and after a layoff. If you want to read more about planning layoffs and outplacement support services, take a look at the articles on our website.
Your step-by-step guide to managing layoffs in a compassionate and effective manner.