If the current economy is a black cloud, then layoffs sit at its absolute darkest center.
Staffing cuts are often fraught with emotion on both sides of the desk. But as a manager, it’s your job to make sure that any layoff is handled properly. This will help protect your business and remaining employees as well as maintain the dignity of those laid off.
Unfortunately, when companies are faced with cutting staff members, good planning often falls by the wayside.
“[Many firms] are not necessarily taking the time to evaluate which people would be the best [to cut],” says Sue Murphy, association manager of the National Human Resources Association in Nashua, N.H. “I’ve seen some organizations that cut positions and then sat back and say, ‘What did we just do? How are we possibly going to cover that function?’ Or, ‘Shoot! That person has access to all these bank accounts that we have, and we don’t even know the passwords.’”
For the sake of your company and the people being let go, take some time before completing a layoff to get your ducks in a row. Below are a number of points to consider.
Before making the decision to cut an employee, be sure to clearly outline how that person’s work will be redistributed. This will help confirm whether you can truly afford the loss.
If you have duplicate positions — say, two schedulers — assess whether the remaining employee can handle all the work on his or her own. If your layoff is someone with a unique job description, it becomes more complicated. Can all of their work be handled by one other person, or should you distribute it among two or three remaining staffers? Write down all of their responsibilities and assess which of your employees have the time and skill sets to handle each one.
If you anticipate further downsizing in the future, it’s important to cross-train your staff in preparation.
Avoid wrongful termination lawsuits
Some layoffs are trickier to defend than others, especially in court.
The easiest to secure is when a position is completely eliminated because your company will no longer perform a certain task or service.
“That type of layoff is ideal, because it’s strictly based on the business,” says Ken Pinnock, director of the Human Resource Department at Mountain States Employers Council based in Denver. “The job termination has nothing to do with the individual.”
If you must choose between two or more individuals with the same basic job description, the most neutral dividing line is seniority, he adds. When making a decision based on performance, you should have documentation stating that the person being let go was behind the others. This can be employee evaluations, sales logs or even e-mails that show a quantifiable difference between staff members.
Evaluate your layoffs to make sure that not everyone falls under protected categories that could claim discrimination, such as minorities, or employees over the age of 40.
In addition, be careful of layoffs that look retaliatory. This can include staff members with recent issues such as medical leave, workers’ compensation claims, or complaints of harassment or discriminatory treatment.
Prepare severance and benefits
Many states mandate that employees receive their final paycheck upon being let go. In some areas, that payment must include unused vacation.
Assess what you need to provide, including any additional benefits specific to the employee. Was he or she promised a bonus that they haven’t yet received? Are you offering a severance package tied to length of tenure? Some managers will compensate a staff member through the end of the pay period, and extend their health insurance as well.
“People might cycle back into your organization at some point, so you want to make sure that everybody leaves with a good taste in their mouth,” says Jill Evans Silman, vice president of Meador Staffing Services in The Woodlands, Texas. “Even if you don’t have to do it, sometimes the goodwill is worth it.”
Besides severance, you may be able to provide information to make the transition easier on the employee. Gather instructions on how to apply for Cobra, unemployment benefits and workers’ compensation if they’ve recently filed a claim.
In addition, think about ways to make the transition easier psychologically. Research whether any low-cost counseling is available in the area, and collect contact information so the employee can consult them if needed. If your medical plan includes an Employee Assistance Program, provide contact information for that as well.
Collect info and equipment
Employees commonly are given a variety of items owned by the company, including keys, gas cards, credit cards, cell phones or tools. They also might hold valuable information such as access codes, account numbers or the status of projects.
Before the layoff meeting, be sure to create a checklist of every piece of company property currently in the employee’s possession. And cancel their access to credit lines and bank accounts ahead of time.
Cover legal bases
If you don’t have a human resources expert on staff, contact a local labor and employment attorney to make sure you are crossing all your T’s and dotting your I’s. They’ll know about local laws, and can provide advice about the kind of language to use in your communications.
The attorney may encourage you to draw up a termination statement acknowledging why the employee was let go and stating that they will not press legal action. If so, the attorney can supply you with the proper language.
“It’s worth spending the money to sit with a lawyer for an hour and say, ‘OK, here’s what I need to do. Walk me through how I can do this so I protect the company,’” Murphy says.