How to develop a compassionate strategy for layoffs

Times are tough for the tech, finance, and media industries, as firms pursue layoffs to address bloated pandemic hiring and changing economic headwinds. Heartbreaking stories of affected employees have become commonplace on social media feeds and news sites.

Alas, HR is often responsible for facilitating downsizing, so it’s important that people people design them in the most considerate manner possible.

“Employment provides us with the financial means to support ourselves and our families. Involuntarily severing someone from the role that lets them do that is a fundamental mental assault on their well-being,” Sandra Sucher, economist and business management professor at Harvard University, told HR Brew.

Pump the brakes. Sucher said that the first step to designing a layoffs strategy is to consider whether it’s necessary at all, and to provide leadership with all available cost-cutting measures as alternatives.

Research shows myriad long-term repercussions can often significantly outweigh the short-term financial gains of layoffs. Sucher pointed to Honeywell, the technology and manufacturing company, which opted to pursue furloughs instead of workforce reductions amid the Great Recession. This benefited the company in the long run and kept employee morale intact, former CEO Dave Cote told Investor’s Business Daily.

“Other things that people do—which [can be] more effective—[are] internal reassignments, because what happens is that organizations don’t stop needing people to do work…and then there’s the idea of natural attrition,” Sucher said. “The combination of those can actually get you pretty close [to cost-cutting goals], but very few companies have the guts.”

Additionally, HR should serve as a “bulwark against unfairness” as top brass look to cut. Create fair systems and processes that scrutinize the list of proposed layoffs to make sure that known biases aren’t creeping in.

Think about communication. Employers need to communicate the factors that went into the decision honestly and transparently, and leaders should take ownership of their mistakes, Sucher said, like when Stripe CEO Patrick Collison sent a “personal and quite straightforward” memo detailing factors that contributed to the online payment processing platform’s layoffs, where it had gone wrong, and how the company planned to move forward.

Ensure internal communications clearly state how much employees are valued and how the decision is not a reflection of their work. Layoffs are not performance management.

Support laid-off employees. Teresa Sayler has been on both sides of layoffs. She’s an HR manager at Blue Cross Blue Shield, North Dakota, and used her own layoff experiences to inform how she’s helped manage the process for others.

Sayler recommends overpreparing employees: Think of all the information and the different types of support—financial, emotional, professional—they might need, and develop a step-by-step guide for them to get through the experience.

A checklist with key dates and contact information helps simplify the phase out of benefits, career and résumé support can help employees better identify their next career move, and emotional and mental health resources can help them process what’s happening.

“You have so many things running through your head if you’re the breadwinner of the family or even if you’re not,” Sayler said. “How are you going to pay your bills? What am I going to do with all my work?”

Most layoffs Sayler has managed have included 60-day notices, so employees have time to prepare their next steps.

“In old-school, traditional HR…you want people to leave as quickly as possible because there’s a risk that they’ll have access to your systems, they’ll be disgruntled and do something inappropriate,” Sayler said. “Sure, that’s a risk, but at the same time, you can mitigate that, and if you’re treating these people as humans, they’re less likely to do those types of things.”

Sayler said that in her experience, employees care about their work and value the opportunity to help with the transition.

Reassure those who remain. It’s imperative to provide a similar level of care to those still working.

Layoffs are traumatic for everyone involved, and layoff-related disengagement, Sucher said, can contribute to a loss of worker productivity, quality and safety, and innovation. Provide employees with emotional support and a space to have their questions answered, and make sure they know that executives have a plan to keep the company moving forward. Sucher said it’s on companies to nurture the trust broken by the layoffs and plan for workload changes.

“Do we have the same amount of work that now needs to be done by fewer people?” she asked. “Or are we going to take some things off a plate so that there’s less work [and it] matches the ability of the people to do it?”

Train managers and execs. This period is mentally draining on managers and executives, too. HR can help alleviate added stress by training them to answer questions about the process and how to support employees emotionally.

“We live and breathe people, and everything associated with it. Our leaders, whether they should or not, sometimes don’t think about it from that perspective,” Sayler said.—AD

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