Reductions in force, also known as layoffs or RIFs, are an unfortunate, and at times unavoidable, cost of doing business. When a company decides to eliminate a product or cancel a service or is losing money, part of the solution might include reducing headcount.
Reductions are seldom a happy event, though occasionally they are welcomed by one or two people who were already planning to transition. How a company treats people and communicates during turbulent times is an important reflection of its culture and values.
If you are facing a reduction, what can you do as a leader to demonstrate a high degree of respect and empathy for your team?
Plan carefully.
Layoffs that leave the worst scars are those that are frequent and unpredictable. Employees described one local company with repeated layoffs as a place where “the blood on the hatchet never dries.” That is not the reputation you want. If you must reduce headcount, leaders should spend ample time discussing the reasons for the change and then carefully evaluate who will be affected.
Write out a business justification with answers to these questions, and review it with your human resources and legal teams:
• What business change is making a layoff necessary?
• Which role(s) will no longer be needed in the near future and long term?
• Are there upcoming needs or open roles that people can transfer into?
It’s always better to hold a single round of layoffs, rather than chipping away at your workforce. It builds confidence in leadership when all employees understand the business rationale. Remaining employees won't be looking over their shoulders and wondering if they’re next.
Be thoughtful about when and how you communicate.
As human beings, our first reaction when we hear about a change is to consider how it impacts us personally. I have seen a situation where someone’s name was accidentally left off the new organization chart even though her job was not changing. She was so upset she ended up resigning.
In another case, managers were not told when their own direct reports were being let go. Once an employee was almost laid off because he was assigned to the wrong cost center. During layoffs, administrative errors have huge consequences. Remember that people will read into all formal and informal communications when companies are going through big organizational changes.
Considerate communication means:
• Keeping the conversation to a small group until changes are finalized. That way people are not distracted by half-baked decisions.
• Identifying everyone who needs to know, including managers and HR, before communicating with employees.
• Creating a plan to share changes with people who are on leaves of absence.
Demonstrate respect and empathy.
One of the hardest things leaders will do is terminate an employee, whether it’s for performance reasons or during a layoff. Nothing feels worse because these decisions have a dramatic impact on people’s lives.
In one HR leadership role, I had to coordinate a number of layoffs. We set aside an hour for each employee conversation, with breaks in between discussions. Our goal was to ensure that each person had time to internalize what was happening and ask questions about things like severance and benefits that were important to them. We wanted people to have plenty of time to compose themselves and not feel rushed before returning to their offices.
Pitfalls To Avoid
If you're making changes that are going to result in layoffs, do not be in a rush. Take the time you need to create a thoughtful business and communications plan. Enlist the help of your senior team, HR and legal. If employees have an upcoming bonus payment or stock vesting, try to be generous. The importance of logistics, including the timing of communications and finding private spaces to talk to employees, can not be overstated.
