An Insider’s Guide To Handling A Reduction In Force (Layoffs) Without Dire Repercussions

An Insider’s Guide To Handling A Reduction In Force (Layoffs) Without Dire Repercussions

Although unpleasant, layoffs or a reduction in the workforce are an inevitable part of any organization. Sometimes a reduction in the workforce can affect a big number of employees at once or may just affect a few. For whatever reasons they may happen, the way you treat your employees as they exit is very important.

According to a survey undertaken by CareerArc Employer Branding Study, 38% of those who were laid off shared a negative review either online or through word of mouth, about the company who let them go.

So, it’s extremely important to let go of your employees with dignity so that they leave with a more positive impression.

Reasons for Reduction In Force

Reasons For Reduction In Force

Let’s admit it, layoffs can be stressful for either party. And, that is why it is important to be transparent and clear about the reasons for termination.

Here are a few reasons why a reduction in force occurs:

  • Merging of two or more companies
  • Economic crisis
  • Change in management
  • Cost cutting
  • Downsizing the workforce
  • Outsourcing
  • Replacing manpower with automation, technology or equipment
  • Optimized workflow with new business processes
  • Strategic changes
  • Terminating a non-performing or underperforming team or employee
  • Overstaffing
  • Slow sales or production
  • Relocation or plant closure

When providing an explanation to the employee about their termination, pre-determine the exact reasons and be transparent. Discuss the reasons for termination and be sure not to wholly base it on the employee’s performance, personality or other personal factors.

After all, they are under a lot of stress and just because they are exiting your organization it doesn’t mean you stop lending them emotional support. Establish a cordial relationship and deliver the message with dignity.

Best Practices To Implement Reduction In Force!

Here are some ways to ensure that a reduction in the workforce doesn’t lead to dire repercussions!

1. Communicate The Message Tactfully

One of the most difficult tasks is delivering the bad news. Not only is this process infested with legal landmines, but delivering what is often uneventful news to a colleague sparks feelings of anxiety, guilt and even panic. This is why you need to rehearse the entire meeting and be prepared to take it head-on.

Prepare a script before convening a meeting and notifying the employee. Be clear of what to say and what not to say.

For instance, don’t beat around the bush and indulge in small talk in reference to the weather or other current events at the opening of the meeting.

Be transparent with the reasons and get to the point. Give time for the employee to react and answer their questions calmly. Also, you can offer your reassurance to the employees by making them part of the employee alumni network and letting them know that they will be considered for positions in the future as and when the business needs them.

At the same time, state your case with confidence and don’t be over-empathetic. Try to anticipate the questions ahead of time and have your answers ready. This will enable you to deliver the message in a consistent, humane and professional manner.

2. Take Care Of Employees That Are Not Being Laid Off

You might get so caught up in focusing on the employees who are leaving the organization that you often tend to ignore your current employees. These layoff survivors may experience a range of emotions and you need to put a rest to them.

Announcing to the rest of the employees about the reduction in force causes the room to fall silent and generates feelings of fear.

The last thing employees want to hear is a sugar-coated version of what exactly is going on. So, communicate effectively the truth about what happened and why it happened.

Be consistent with your communication and address the common questions of who, what, why and what next. This will enable the organization to move forward with new initiatives once the employees understand why those decisions were actually made.

Foster an environment of open communication and undertake small meetings to convey the organization’s plan of how work will be re-distributed in alignment with its business goals.

Reasons For Reduction In Force

3. Beware Of Legal Risks

Last but not the least, don’t ignore the legal aspects. Be well-informed about the laws and company policies. Always comply with the law and provide the employee with the right notice period to avoid any legal hassles.

As obvious as it may sound, ensure that your reduction in force decision is not discriminatory and is legitimate enough.

For instance, if your reduction in force decision affects a number of employees belonging to a certain class based on age, gender, or religion, you might want to rethink the decision.

Common Mistakes During A Reduction In Force

  • Lack of clarity in business goals – Undertake the reduction only if it is in tandem with your business objectives and current needs!
  • The absence of clear clarity for selection – Once you have determined that a reduction is needed, you have to select the right people with the right criteria!
  • Not anticipating risks and adverse reactions – Don’t take blind decisions without assessing the risks first!
  • Improper delivery of the message and not sticking to the script – When the employee asks “why me?”, you need to be prepared to deal with it and rehearse beforehand what you can say and what you can’t say!
  • Not doing anything in terms of follow up – You can also consider helping the employees with outplacement services or severance packs to end the relationship cordially!
  • Dealing with people without respect and dignity – Remember that you are dealing with people, and not numbers.

Move Forward Together

The whole process of reduction in force is complete once all those who need to leave, leave with respect, equanimity and dignity and all those who are staying are engaged in their defined duties. By following the best practices and avoiding the common pitfalls, you can be sure to mitigate your risks and enforce a healthy business environment.

As much as we hate them, these measures need to be taken for the greater good of the company.

Employees make the organisation, even if some may have to be let go intermittently. It is important to handle a reduction in the workforce well, to reinforce positive work culture, foster employee loyalty and create a favourable image of the organisation!


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