Tips for Handling Layoffs
2 February 2001 - Consulting firm Drake Beam Morin (DBM) warned employers against short-sighted workforce decisions and badly handled employee terminations. Layoffs may be necessary at times, but they can have a negative impact on an organization's productivity levels and affect ther ability to retain and attract talent employees in the future.
"From a company's standpoint, the decision to terminate a group of employees is fraught with potential legal, financial and public relations consequences," said Thomas Silveri, president and chief executive officer of DBM. "It is critical that managers communicate the news of layoffs in a professional, legal and humane way in order to treat the departing employees with sensitivity and to maintain a respectful corporate image."
DBM recently conducted a global study which revealed that 1 out of every 10 individuals who lost their jobs involuntarily in 2000 told a colleague first of their job loss. So the manner in which they lay off employees can have a direct impact on the morale, commitment and retention of remaining staff.
DBM has experience in working with organizations undergoing restructuring over three decades and has come to know that there are right and wrong ways to handle a layoff. We quote DBM's recommended five-step process for managers to ensure a successful termination:
- Prepare the materials: Explain the rationale and prepare all severance information in writing (notification letter, salary continuation/severance period; benefits; outplacement, etc.)
- Prepare the message: Write the script you will use during the meeting and the key information you will convey to remaining employees. Keep it short and to the point.
- Arrange the next steps: Schedule meetings with your organization's human resources and outplacement professionals. Review what should be done with the departing employees' personal belongings and specify when the employees should leave the organization.
- Prepare yourself emotionally: Don't assume personal responsibility for the termination. Remember it is a business decision based on business needs. Acknowledge your anxiety, prepare your approach and talk about your feelings with the human resource and outplacement professionals.
- Anticipate employee reactions: There are typically five reactions to termination: anticipation, disbelief, escape, euphoria, or violence. By acknowledging these various reactions and learning to recognize them, you will ensure that no matter what the reaction, you will be prepared to handle it in the best way.
DBM recommends that the following Dos and Don'ts should be followed when conducting a termination meeting.
- Do invite the employee in to sit down
- Do get right to the point
- Do explain the actions taken and the reasons
- Do listen to the employee and wait for a response
- Do restate the message if necessary
- Do use your prepared notes/guidelines
- Do clarify the separation date
- Do give an overview of the separation package
- Do explain the logistics for leaving the company
- Do provide appropriate written materials
- Do close the meeting within 15 minutes
- Do escort the employee to the next appointment
- Don't say "Good Morning," "Good to see you," or "How are you?"
- Don't engage in small talk
- Don't use humor
- Don't be apologetic
- Don't defend, justify or argue
- Don't threaten
- Don't discuss other employees
- Don't sympathize
- Don't try to minimize the situation
- Don't make promises
- Don't personalize the anger
- Don't use platitudes like "I know how you feel," or "You will be just fine," etc.
"Managers need to learn how to manage this process in a way that preserves the current productivity levels and the company's ability to attract top talent in the future," said Silveri.