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The People & Culture Platform | Culture Amp
Rachel Bosu, Culture Amp

Rachel Bolsu

Content Lead, Culture Amp

Layoffs are arguably one of the most challenging aspects of an HR manager’s job. In some cases, HR serves as a mediator between an organization and its employees and it’s never easy to account for the feelings of everyone involved. However, there are ways to lay off employees gracefully with compassion and respect

In the face of the coronavirus pandemic, there has been a lot of recent coverage on layoffs - in particular, companies who are handling them well or poorly. In this article, we’ll look at the benefits of managing layoffs and downsizing with compassion, and detail how to do so effectively.

Layoffs have a ripple effect

Organizations are in the public eye during times of crisis. Remaining employees, future candidates, and customers are watching the way companies handle difficult situations. Because of this, employer brands can feel an impact if hard situations are handled carelessly. 

It’s important to keep this in mind, as companies undergo layoffs for various reasons and in many different economic landscapes. If not now, you may face a rough patch that leads to layoffs down the road. However, in a few years the organization may grow again, and you will need a strong employer brand to attract and retain talent.

Layoffs also impact the morale of existing employees. After downsizing, those who stay will be watching to determine whether or not they want to stick around. In fact, research shows that downsizing a company by 1 percent leads to a 31 percent increase in voluntary turnover the next year. This highlights the importance of handling layoffs with compassion, and fortunately there are ways to do this effectively.

The do’s and don’ts of respectful layoffs

DO be human

People spend 40+ hours a week at work, so it’s important to care for their wellbeing. How you communicate layoffs to employees especially matters when it comes to their mental health and sense of value as a human being. When facing remote layoffs, mass video calls may seem efficient, but they make employees feel disrespected and undervalued. Arrange a personal call from a manager who can explain the situation and thank employees for their contributions. This is just one way to help them regain confidence after layoffs.

DON’T be evasive

Employees will be much more receptive if they feel like you’re being straightforward with them. Treat them like professionals and show them the courtesy of handling this difficult situation with respect and transparency. When leaders show vulnerability and candidly discuss the reasoning behind difficult decisions, they earn respect and understanding.

DO provide transition resources

Transitioning to unemployment can be intimidating and stressful. Provide employees with resources on filing for unemployment, maintaining benefits coverage, understanding their severance package, and even consider offering resume or cover letter support. A little bit can go a long way in showing the affected employees that the company wants to see them succeed.

DON’T neglect managers

Managers are an employee’s best resource in their search for the next job, so encourage them to provide references, resume support, and introductions to people in their network. Even if you’re not currently undergoing layoffs, consider proactively training managers to better support their employees through any change. Managers are on the front lines in the aftermath of layoffs, so it’s crucial to help identify ways to keep their remaining employees motivated and engaged.

DO create an alumni network

Employees who spend any tenure in a company have likely built strong connections with colleagues, managers, and even leadership. A great way to support their transition and nurture these relationships is to provide a channel through which employees can stay in touch even after they depart. Whether it’s a Linkedin group or a Slack channel, this could open the door for employees to network and even potentially boomerang down the road.

DON’T reinvent the wheel

There is a lot of negative press around recent layoffs to learn from, but also a lot of learning opportunities. Look at how other companies are handling difficult situations and adopt the strategies that best align with your culture and values. Carta and Airbnb are great examples of companies that handled layoffs with transparency and compassion.

DO embrace feedback

After layoffs, former and remaining employees are likely feeling a lot of raw emotions. It’s important to give them an opportunity to share their experience and voice their concerns. Offer exit surveys to learn what worked and how you could better handle these challenging situations in the future. Giving employees the chance to be heard before they depart the company shows them you value their input despite the unfortunate circumstances.

DON’T neglect remaining employees

Employees who remain after layoffs can feel disheartened and unmotivated. Survey remaining employees to understand the impact on their experience and engagement. Gather and act on feedback from everyone impacted by the layoffs. This shows a commitment to improving the employee experience. And with this insight, you can help rebuild trust and offer resources to help your team as they grieve the loss of their colleagues. 

Moving forward after layoffs

While everyone hopes mass layoffs are a one-time last resort, you never know what the future holds. Learning from the experience will help you prepare to better handle future difficult situations.

According to a study by RiseSmart, after a negative layoff experience, 70 percent of companies experience a negative impact on future talent acquisition efforts, and 81 percent report a negative impact on brand. Stay in tune with remaining employees to find ways to support them after layoffs.

Use feedback to identify areas for future and immediate improvement. Don’t just focus on process-level improvements, but look for opportunities to act immediately to mitigate any negative feelings in the aftermath. For example, if many affected employees felt inadequately supported, consider reaching out with resources to help them navigate the transition.

Managing layoffs and downsizing is never easy or comfortable, but when it is unavoidable it’s imperative to handle them thoughtfully from start to finish. Employees, candidates, customers, and brand advocates will remember how you supported your workforce through hard times. Organizations who prioritize compassion and communication are better positioned to strengthen employee trust and brand loyalty.

Employee feedback is the key to loyalty and retention.

Do you have visibility into your employee engagement?

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