It seems as if every day brings more
bad news about the economy. As you
watch the approaching clouds of recession, you may wonder if an economic downturn would mean having to
downsize your work force.
“Laying off employees is probably the
worst task a CEO or business owner
must face,” says Ryan Matusik, Business
Consultant from the Employco Group, a
human resource outsourcing company
in Westmont, Ill. “It’s never easy to let
employees go, but the pain can be lessened by following what I refer to as the
four ‘Cs’ of downsizing: confidentiality,
compliance, consistency and compassion.”
Smart Business spoke with Matusik
about how these four Cs can help you
prepare for the worst-case scenario.
What is the first thing you need to do to prepare your company for layoffs?
The first ‘C,’ confidentiality, is important in order to prevent rumors of an
impeding layoff leading to speculation as
to who will be laid off. If employees
learn of an impending layoff before it is
official, employees that you want to
retain may leave to pursue other options. It is important to perform due diligence and assess the entire situation
among appropriate parties before making an official announcement to staff. It
is crucial that all parties involved in the
decision-making process respect the
confidentiality of the matter.
Be mindful of compliance issues —
the second ‘C’ of downsizing. Meet with
your lawyer, human resource professional and other trusted advisers to
make sure that you are in compliance
with all federal and state labor laws. It is
important not to single out a particular
group of workers and risk violating
equal opportunity laws.
Consistency, the third ‘C,’ comes into
play when deciding which employees will be terminated. Do not let emotions
play a role in the decision-making
process. This decision should be based
on past performance and skill set of
each employee. This should not be a difficult process as long as your firm has
kept up-to-date performance evaluations
for all employees.
How should you position the layoffs to your
employees?
The fourth ‘C,’ compassion, is important when addressing staff with the
unfortunate news of a layoff. The way
you treat employees who have just lost
their jobs reflects not only on your
company but also on you as a business
owner.
Losing a job is an emotional experience for workers and their families. You,
as a CEO or the business owner, need to
be empathetic to your workers’ situations and offer support — however limited that may be.
And what ways should be considered?
There are actually many things that
even a cash-strapped company can do to
lessen the pain of a layoff.
Provide a severance package. This
may not be possible depending upon the
financial state of the company. However,
even the smallest severance package
shows your appreciation for the worker’s service to the company.
Provide a useful information package. Include pertinent information
about the layoff, including any monies
due to the employee, such as vacation or
personal time not used; benefits, such as
how long the employee is eligible and
where to apply for COBRA coverage;
and unemployment information.
Provide help in job seeking. Be
proactive in directing former employees
to local job fairs, resume-writing organizations or outplacement services.
What can you do to minimize low morale
among employees after the downsizing?
You need to give your workers an open
and honest assessment — through verbal and written communication —about
why the layoffs took place. After discussing the reasons for the layoffs, outline steps you are taking to remedy the
financial situation. You also need to outline positive steps the company will take
to increase revenue, such as landing new
accounts or launching new products.
Explain the business plan to the staff
and set a goal to reassess the new plan in
six months or a year’s time. Keep open
lines of communication with your current employees on a weekly or even
daily basis regarding the status of the
company. The key is to be honest and
consistent in your message.
RYAN MATUSIK is a Business Consultant with the Employco Group (www.employco.com), a division of The Wilson Companies.
Employco handles human resource outsourcing for 400 small and medium-sized Midwest companies. Reach him at (630) 286-7356 or
[email protected].
