5 Reasons Why Layoffs Should Be a Surprise
Now for a topic I'm sure I'll get angry letters about: layoffs.
There are two rules to a proper layoff: It should be kept secret, and it should include severance.
It sounds mean spirited and a lot of people will disagree with me. They'd say, let employees know as soon as you do so they'll have time to prepare. I accept that as a valid strategy, and I will say, you should do that if you're not going to offer severance. The law does not require severance except in a few specialized situations--like a contract, or when you're laying off a substantial number of employees. Consult your employment attorney.
But, you should always offer severance. How much? As much as possible. Not even joking. But, at least two weeks per year of service, with a minimum of 12 weeks.
So, what benefits do you get from offering severance and not giving advance notice? Here are five:
1. Laid off employees can move on with their lives. I know this seems silly, in a "it hurts me more than it hurts you" kind of way. But, it's honestly true. If you're told, "Your job is ending in six weeks," you're stuck coming into work every day. You can't devote your time and effort into getting a new job, because you're coming into work every day.
2. Remaining employees can move on with their jobs. The only thing more awkward than having to come back to work when you've already been informed that your job is ending in a few short weeks, is working next to an employee who has already been laid off. What do you say, every day, for six weeks? "Hey, Bob, how's the job hunt coming? And could you hurry up with that project! It needs to be finished before your last day!"
3. One and done increases morale. One of the hardest things about layoffs is that it's not only difficult on the people losing their jobs, it kills morale with your remaining employees. "It was Bob's turn; when is it going to be mine?" If you, instead do a big, "today is the last day," announcement, and then clearly inform your remaining employees that layoffs are now finished, it allows everyone to rest easy.
4. Severance reduces your chances of lawsuits. You never just hand someone a severance check. In exchange, they need to sign a "general release" which says, essentially, in exchange for this money, you won't sue me. (Now of course, there are some rights they cannot waive and the U.S. Equal Employment Opportunity Commission is currently trying to make general releases less valuable to employers. Check with our attorney.)
But, if someone is working that same time period, you have to pay him because he is working. They aren't required to sign anything to get that money, and as a result it leaves you more vulnerable to lawsuits. (And remember, they don't have to have a winnable case, just enough of a case to get an attorney to listen to them, and it starts costing you a fortune.)
5. It gives you a clean break. When you're laying people off, you're going to be short staffed for a period of time. It takes time to adjust to a lower number of workers. It just does, and there is no way around that. When you notify in advance, what tends to happen is things don't get quite finished and you extend and then you extend again, and then the people you've just extended start to think that the end isn't really coming and when it does, you have to go through the whole trauma of notifying them, again. If you pick a day and notify and they leave all at once, you have the shock of picking up things but, it's done. You don't have to fret and reconsider a thousand times.
When I've laid people off (which I've done a lot), the people who, for business reasons, got advance notice, always had a more difficult time transitioning into the job hunt and a new job than the people who got the shocking news all at once. But, I also want to emphasize, very, strongly, that if you are not going to offer severance, then do give as much advance notice as possible. But with severance? Just do it and be done.
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