As a business owner, you know your employees are the backbone of your company. If you need to shore up resources in tough times, though, it could entail laying off one or more people. When facing such a difficult choice, it’s important to realize that the impact of your decision will be felt throughout the organization.
What is the best approach for business owners to take when they have to lay off staff? There are effective ways to limit the amount of distress it causes, not only among those being laid off, but also among their peers who remain. Here, 15 members of Forbes Coaches Council discuss how to achieve better results when layoffs are unavoidable.
Forbes Coaches Council members offer advice to help business owners deal with unavoidable layoffs.
Photos courtesy of the individual members.1. Be Honest And Show Empathy
Be honest; share data, plans for layoffs and hopes for the future. Show empathy; it is not just another business decision. Give fair notice, severance and realistic extensions of healthcare benefits. Help people find another job, if possible. Reinforce that, if business is better, rehiring is possible. Most layoffs are so brutal. - Maryann Billington, Action Leadership Group LLC
2. Start By Explaining Why
First, tell everyone why the business needs to right-size. Decide which critical jobs are needed to succeed. Rank every employee by job. For those ranked high in unnecessary jobs, decide whether they can be retrained and kept. Keep the best people. Let the lower tier go. Leave them with their self-esteem, provide outplacement services and let everyone who is staying know that you’re done. Make all layoffs on the same day. - Jay McDonald, Middleton McDonald Group, Inc.
3. Be There For Your Employees
The message is a tough one, so provide resources, don’t hide, and be transparent and honest in your conversation. Offer to help, write letters of recommendation and open doors for the impacted. Communicate with them first, before communicating more broadly. Show empathy, reassure the remaining staff, keep close tabs on the temperature and handle issues promptly to reduce anxiety. - Christine Mann, MANN Consulting, LLC
4. Explore Ways To Spread The Impact
Having a reduction in workforce is never fun, but one way to help lessen the blow is to first explore options that spread the impact across many. If this does not work, then finding ways to support those affected and also keep them in the loop while away from the workplace would help lessen the emotional trauma that accompanies the financial burden. - Dan Ryan, ryan partners
5. Share Relevant Business Metrics
I share business metrics, such as overhead expenses, with my management team. Sharing these numbers with staff who are laid off will help them understand the difficult decisions we have to make based on metrics, and hopefully lessen the emotional pain.The remaining members also get a better understanding and become aware of what they need to contribute to help the company thrive. - Emily Letran, Exceptional Leverage Inc.
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6. Focus On Creating Certainty
Create certainty amidst the uncertainty. The stress and fear around layoffs happen because people don’t know what to expect or what it might mean for them. Mitigate the fear and stress by clearly explaining up front how the layoff procedure will work, the timelines and what your company is prepared to do to help the people who are being laid off. - Ashley Good, Ashley Good Coaching & Consulting
7. Protect Their Dignity And Retain Trust
Two simple rules to keep in mind: First, make sure the dignity of the person being laid off has not been harmed; second, the objective is for the survivors to remain engaged and still trust you after you have laid off their colleagues. If they still trust you, it means you have done the right thing. Even better, measure their level of engagement and their level of trust both before and after the process. - Raphael H Cohen, Getratex SA / Management Boosters
8. Offer Severance And Career Coaching
Offer the people who are let go a severance-plus-career-coaching package. This shows your people that you care deeply and want to support them as they update their résumés, prepare for interviews and look for new positions. Be very clear and up front about the decision-making process with team members who stay, then articulate your hopes for them in terms of moving forward. Set the expectation. - Natasha Ganem, Lion Leadership
9. Give Them Outplacement Career Services
Do not buy them off with a “nice severance” because most people just want you to pay them off if you are going to let them go. It is critically important that you build a sustainable workforce policy that ensures people who are laid off (not for cause) will get your help in finding new employment opportunities. Do this. It will save your brand reputation. - John M. O’Connor, Career Pro Inc.
10. Evaluate Their Emotional Needs
Evaluate the emotional needs of both outgoing and current staff. Identify the need, call it out and address the elephant in the room. If it’s pain they feel, empathize. Acknowledge the contributions of outgoing employees. You can make it less painful by making it less about the numbers and more about contributions. The last thing people need is to feel like objects being discarded. - Chuen Chuen Yeo, ACESENCE
11. Make The Decision Collectively
The greatest experience in my career was when our founder brought the financials to us, the leaders and individual contributors, and said, “We need to find $750,000 to cut in this budget.” We collectively made decisions about what to cut out of the budget, and when it wasn’t enough, we felt as if we had been a part of the decision to lay people off. We had ownership of it, and that changed everything. - Nicole Forward, Center for Creative Leadership
12. Put Yourself In Their Shoes
Business decisions such as this are difficult to make, but they don’t have to be communicated in a cold way. Put yourself in their shoes when you craft and practice this talk. What would you want to hear? It is paramount to be honest and come from a compassionate place. Leaders often get uncomfortable and say too much. Be silent while you allow your colleague the time to absorb this painful decision. Offer genuine support. - Beth Fitzgerald, Fitzgerald Coaching and Consulting
13. Be Both Candid And Supportive
This is the time for candor and empathy. Be completely transparent about the reasons for the layoff, and then provide as much support as possible to smooth the transition. Sometimes people grow with the company, but it is not unusual for roles to outgrow the first people who hold them. Different stages of maturity require different skills. Be sure to be generous with outplacement and references. - Kathy Bernhard, KFB Leadership Solutions
14. Hold A Town Hall For Remaining Employees
Clear and transparent leadership and communication are key to reducing stress and emotional pain during challenging times. Ensure one-on-one conversations happen with the employees being laid off and stick to the facts. Call a town hall meeting for employees who remain in the organization. Acknowledge the contributions that impacted employees have made and lay out a roadmap of how the organization will get through this period - Kevin Kan, Break Out Consulting Asia
15. Treat It As An Emotional Process
Leaders make a huge mistake if they don’t treat any type of change as an emotional process. This is why empathy is an essential leadership trait. Communicate clearly and with transparency. Team members will be looking to leadership to be up front and honest about what is happening and what lies ahead. So be ready to answer questions, and be as open and honest as possible with your answers. - G. Riley Mills, Pinnacle Performance Company
