Making the tough decision to lay off or furlough employees is never easy. In 2020, far too many organizations have had to face this difficult task. In fact, over six months, more than 60 million Americans have filed for unemployment insurance — as a comparison, that's more than during the 18-month Great Recession. Unfortunately, layoffs are not over. As a result of the Covid-19 pandemic, nearly one in 10 U.S. businesses plan to lay off workers in the next three months.
The travel industry has experienced a significant hit, with up to 50,000 airline workers across the country potentially being furloughed. Jobs include everything from pilots, flight attendants, baggage handlers, and agents. In the entertainment industry, the pandemic has forced theaters to reduce or close their operations. Cineworld, the parent company of Picturehouse and Regal Cinemas, closed all their theaters worldwide affecting 40,000 jobs in the U.S. and 5,000 jobs in the UK.
Whether the result of typical economic shifts, technological advancements, or changes in the organizational structure, downsizing is an unfortunate and often traumatizing reality. But during the current Covid-19 global health crisis, they can be even more “emotionally and cognitively overwhelming,” according to Joshua Margolis, a professor at Harvard Business School.
Due to the emotional, psychological, financial, and physical toll of being laid off, it is important for organizations to manage them as compassionately and honestly as possible.
Here are four best practices for managing layoffs and furloughs in the most humane way possible:
Have a plan. It’s important to carefully review the reasons and identify the selection criteria for your reduction-in-force (RIF) plan. The Society for Human Resource Management (SHRM) recommends that your RIF analysis should include objective, comprehensive selection criteria that ensure employees on leave are not overrepresented.
Consult your organization’s severance policy, and make sure to consider special circumstances, such as whether the layoffs include workers who are on leave. While employees on leave may be laid off, it is illegal to do so because they are on leave.
Find ways to support employees. During a layoff, managers and HR leaders should demonstrate support and care. Behavioral scientists recommend striving to be encouraging without being condescending in order to “give your employees the resilience and positive attitude they need.”
When managing layoffs remotely, make every effort to connect personally by phone or video so that the employee can ask questions. Although you want to protect your company assets, be as respectful as possible when you gather any equipment the employee had or turn off their network access. Not being able to send a farewell email or direct message can make the transition even more difficult.
Be prepared. When delivering the news, be sure to have the necessary paperwork completed in advance. Provide the employee with information regarding their final paycheck, healthcare coverage, and other benefits. Also, as employees look for a new job, their job history with your company will be an important resource. Ideally your HCM’s employee self-service portal can continue to provide some level of access to all this information, even after employment is terminated.
Communicate openly and often. The employees who remain with your organization are also impacted by the news of layoffs. If they witness that you manage the process with respect, it helps reduce their anxiety. Communicate why the downsizing was necessary and listen to their concerns. Explain the vision for how to move forward and commit to regular check-ins and updates about the future of the company.
How an HCM makes tough situations easier to handle
An HCM system can provide the support you need throughout the layoff and furlough process. Modern solutions offer valuable insights and documentation for leaders to review analytics and detailed reporting that assist with making RIF decisions. Automations within the HCM can also alleviate bottlenecks in HR tasks to ensure prompt execution of the necessary organizational changes.
By leveraging an integrated learning management system, HCMs also make it easy to offer initial, ongoing, or cross-training opportunities for furloughed employees. Skill evaluations within an LMS can also provide terminated employees with helpful insights for future employment and job searches. When a rehire is possible, the historical records stored within an HCM provide a database of past employees that can facilitate the process and also provide recruiters with a list of possible talent.
The impact of layoffs reverberates throughout your organization. However, when handled compassionately and thoughtfully, it is possible to minimize disruption, maintain employee trust, and preserve company morale.
To learn more about the SyncHR platform and how it can support your organization when downsizing or facing other transitions, contact us for a free consultation and personalized demo.