Layoffs are hard for everyone involved, but the degree to which a company is harmed often comes down to how the affected employers handle the situation during and after.
Consequences from layoffs include innovation and intellectual property loss, weakening of business relationships, reduced trust among remaining employees, and the turnover of important talent who get concerned about the company's health.
One of the biggest consequences of a layoff-done-badly is justifiably angry former employees who can tarnish your brand. People understandably vent to friends and family, but they can go further, posting nasty reviews on Glassdoor or telling their stories to the media, leading to longer-lasting harm.
Recently, a heart-wrenching video detailing the plight of over 30,000 Toys "R" Us workers being laid off this year went viral, with over 2 million views on Facebook alone. One clear message from the video is this: treating working people "with contempt" is a bad business strategy, plain and simple.
At FlexJobs, we asked our Facebook audience to tell us about their layoff experiences. Employers should already know to avoid the extreme situations (layoffs the week before Christmas, not paying a last paycheck, placing personal blame on the worker).
But most often, those laid off said it was more how the situation was handled that left people feeling betrayed and insulted. People wished their companies hadn't waited until the last second to announce the layoffs and had demonstrated more compassion.
How can companies ensure a layoff both achieves the right results and protects its reputation? Or, as "Real Evil HR Lady" Suzanne Lucas puts it, how can you conduct a layoff so people are actually better off for it?
1. Think through the plan.
If at all possible, create a conscientious plan ahead of time. Details need to be worked out, like:
Who will be involved in laying people off
What the cohesive message will be and how much detail will be shared
How and where the layoffs will be conducted (individually, in groups, etc.)
Which resources and support will be offered
Weave compassion into each step of the process. Lucas recommends "making the dismissal about their dignity and humanity, not corporate HR rules."
2. Communicate with compassion.
"The key to conducting a compassionate layoff is to focus on the message," says Lindsay Witcher, Senior Director, Global Practice Strategy at the outplacement firm RiseSmart. Be as honest as is reasonably possible and empathize with the difficulty of the news.
Compassionate communication shouldn't come solely from human resources, either, says Witcher. "Provide training for everyone involved in delivering notifications to ensure a smoother, less stressful process."
This is what the laid-off folks on our Facebook page wished they'd experienced. As one described, "The worse part, I was marched out of the building as if I had committed a security violation! The company is a well-known computer company that raves about their successful business, but needs to learn more about how to treat people."
3. Offer outplacement or other unique support options to help ease the blow.
Finances are often tight when a layoff occurs, but there are several support options depending on a company's budget. If it's a possibility, consider offering outplacement support for exiting employees to help support their transition, such as RiseSmart, Right Management, or Lee Hecht Harrison.
If you can't offer extensive outplacement support, provide lower-cost services to positively impact exiting employees' ability to recover and find new opportunities.
Consider covering the cost of access to a job search service like FlexJobs or a LinkedIn Job Seeker Premium account to help people get a leg up in their job search without overstretching the company's already-shaky budget.
Other options include services like resume writing, career coaching, and financial planning.
A Tale of Two Layoffs: The Wrong Way and the Right Way
Nokia has handled layoffs both badly and well. In 2008, they quickly laid off 2,300 people, according to HBR. Their abrupt approach caused protests, a government investigation, boycotts, and an estimated loss of $850 million in sales and $121 million in profits.
In 2011, the company announced more layoffs--18,000 people this time. However, they designed a transparent program to give laid-off employees five support paths, including job search support, retraining and education, and business grants.
The result? No protests. No investigations. And no loss in revenue. The HBR article stated,"60 percent of the 18,000 affected workers knew their next step the day their jobs ended." 67 percent of global employees said they were satisfied with the program.
It really is all about the people. Remember them throughout the process--in planning, breaking the news, and offering support. With compassion, small efforts go a long way and help to minimize disgruntled former employees and bad mojo for your brand. The bottom line is this: when it comes to layoffs, it pays to be kind.