Preparing Your Employees for Layoffs
The year is winding down, and the prospect of further COVID-19 relief packages remains stalled in legislative bodies. Indeed, as the economy struggles to breathe, there is a good chance your business is considering layoffs to stay afloat. As of early November, about 10% of businesses in the United States were considering layoffs. If your business is among them, it's time to prepare your employees for that possibility. While layoffs are never easy, the more effort you put into the process and your severance packages, the smoother it will go.
Forecast Your Needs
Establish which positions and skills are extraneous to your company's needs and goals at this time. This will tell you who you need to retain and how many people you can let go. When deciding which individuals to retain, be certain to factor in seniority, job performance, job knowledge, and specialized skills.
Prepare Your Severance Packages
Identifying employees slated for layoffs is the hardest thing any human resources manager will ever do. The worst thing they can do is not properly prepare severance packages that cushion the blow. Thus, it is imperative to identify the severance package and benefits you can offer. The typical package is one to two weeks salary for every year worked. However, some companies offer up to four weeks for every year.
In addition, your severance package and the materials you prepare will also want to address:
- COBRA Coverage
- Retirement/Pension Plans/Stock Options
- Outplacement Services
- Company Benefits (Health Club Memberships, Company Vehicles, etc.)
- Eligibility for Unemployment Benefits
Meet With Legal Counsel
HR managers are bound by law to adhere to WARN, CARES, and other regulatory requirements. Always discuss your regulatory obligations with legal counsel before announcing layoffs. This ensures you remain compliant with the laws regarding required compensation and notification periods. It will also help guide you on the next and most challenging step; delivering the news.
Delivering the News
Respect is the key to a smooth layoff process. If you respect your employee, they will respect your company's action. It is best to have this discussion in person and with as much notice as possible. This gives your employee an opportunity to ask questions, process the information, and plan their next steps.
Don't Neglect Outplacement Assistance
The best way to cushion the blow of a layoff is to help employees land on their feet. It is wise to invest significant effort and resources in outplacement assistance. In fact, there are many advantages to assisting employees in finding and securing new employment following layoffs. For starters, it stabilizes the morale of remaining employees. While they "survived" the layoffs, many will fret over their fates and that of their former colleagues until they know they've found new work.
Additionally, tough times don't last forever. Many companies will rebound following layoffs. You may want to rehire employees down the road to bring their institutional knowledge, skills, and contacts back into the organization. If you have cushioned the blow and maintained a sense of mutual respect, they will eagerly accept the offer to return. This can expedite your rebound and significantly expand your company's capabilities and the opportunities you can pursue.
The team at Greenlink Payroll understands the challenges and regulatory requirements inherent to layoffs. We invite you to contact us at (480) 385-2525 to speak with our team about how we can help your business weather the storm so that your company emerges stable and prosperous when the clouds subside.