Considerations before you do the Layoffs?

Address the following before considering a layoff or downsizing:

1. Restructure the organization. Involve your employees and create flexibility, performance agreements, and a compensation system that is based on the value contributed by each employee. Downsizing without restructuring is a formula for disaster!
2. Increase company communications including company and individual expectations, benchmarks, guidelines, and feedback mechanisms. Be open with information. Share your financial position with your employees through open book management. Without it there will be rumors and paralyzing fear will spread.
3. Remember that there is a cycle of change and loss that applies to the workplace as well as the home life. That cycle is denial, anger, bargaining, depression, and eventual acceptance. Offer counseling services for those who stay.
4. Look at possible alternatives to downsizing which include wage reduction, benefit reduction, and elimination of overtime. Approach your employees and find out if they can think of new ways to generate business. Look for old projects that can be expanded or old clients that can be reactivated.
5. If you don’t have one, prepare a layoff policy. Include objective factors such as company needs, financials, seniority, quality of past work performance, anticipated needs for skills and experience, and compliance with EEO laws. Create a “ranking” process using these factors, and follow it consistently in a form-based approach. Have your attorney review your Reduction in Force (RIF) procedure before and after it is implemented. Know what the WARN requirements are, notice requirements, contact your unemployment offices which are involved, seek out resources.
6. Avoid claims and litigation by departing employees through separation agreements, and a strict adherence to company guidelines. Be particularly sensitive to older workers, long term employees, women, and minorities. In larger companies, consider hiring an industrial relations statistician to review a RIF decision before they are implemented to prevent disparate impact discrimination claims.
7. Assist those who will be leaving through severance packages, out-placement opportunities, consulting agreements, counseling services, employee assistance programs, etc. They may return when times are better and will also share their experiences with the public.
8. Offer voluntary resignation with a severance package. If you want employees to stay beyond a certain date, state that the severance will be paid only if employees stay through that date. Require the signing of a release as consideration for any severance package. However, be careful not to loose your knowledge base through early retirement incentives, ensure that you have transfered necessary skills and knowledge and documented processes before valuable employees leave.
9. Prepare your conversation to explain to affected employees why their position was eliminated and provide them with an information sheet with question and answer approach explaining the layoff or downsizing process. Provide departing employees with required handouts and pamphlets related to continued medical benefits and unemployment rights. Prescription benefits and 401k loans are often top of mind.
10. Use a grievance system, ombudsman or hot-line program to handle complaints of unfairness.
    
    Watchout for specific state laws, employment and bargaining unit contracts!