Week after week, headlines deliver the same news about persistent inflation and volatility in the job market. Layoffs and the economy are top of mind for many workers as companies recalibrate from three years of pandemic-related adjustments. Managers not only have to make tough choices that could impact the future of the business, but they also have to consider how layoffs affect employees.
With any round of layoffs, it's on the shoulders of leaders to communicate why company downsizing is necessary, balancing layoffs and productivity, and maintaining morale - all of which require high levels of emotional intelligence.
"Communication and leadership are all the more important in times of crisis," says Daniel Zhao, Glassdoor's lead economist. "It's important for leaders to show empathy to departing employees, give space for remaining employees to process their emotions and, when appropriate, refocus the company on the strategy moving forward."
As you meet with your company leadership to discuss the current climate and its impact on your bottom line, you may be looking at scenarios where you simply can't avoid layoffs. While it may be tempting to focus on revenue and balance sheets, prioritizing how it could impact employees is a must.
Thoughtfully approaching these big HR decisions will not only serve those who may be losing their jobs, but it also sends a strong signal to those employees who keep their roles. In both cases, handling layoffs well can go a long way in improving the employer brand.
To help you navigate the complicated team dynamics, Glassdoor spoke with executives and leaders across several industries to hone in on the best ways to manage your teams through layoffs.
Operate with compassion and empathy
"Remember that a layoff is a somber event...as much as you may want to highlight the positive and rally the remaining employees, it's not a time for parties or celebration," says Rob Chesnut, Chief Ethics Officer of Airbnb and author of Intentional Integrity: How Smart Companies Can Lead an Ethical Revolution.
How you act now will leave an impression on your employer brand. Chesnut adds, "One Bay Area company famously announced layoffs, then served the remaining employees rounds of tequila and had a DJ play music; those who remain will need to grieve at the loss of teammates, and will want to see financial austerity."
Managers and executives are uniquely called and qualified to step up with both the business and the employees in mind. "Any communication regarding any change in someone's employment - reduction in hours, reclassification, furlough or layoffs - it's important they be handled with sensitivity," says HR consultant at Red Clover, Erich Mochnacz. "Right now, employees are potentially juggling child care, worries about their own and others' health, and the potential of job loss. If their manager is able to demonstrate calm, rational thinking and communication rather than panicking alongside their people - that's key to navigating this unknown territory. The minute you respond to panic with panic, you lose some level of integrity as a manager."
Furthermore, it is wise to build out communications and FAQs for all employees. "Honesty and consistency will keep employees engaged. When you communicate honestly, employees will be able to trust you and remain loyal and engaged," says Jared Weitz, CEO/Founder United Capital Source Inc. "If there is a topic or element that you can't address, be upfront and tell them that. The last thing your team needs is someone dancing around the answers. Humans are creatures of habit and when you can keep things as consistent as possible, especially during tough times, the team will feel safe and better capable to manage their work."
Be human first
"It's ok to be vulnerable and express your emotions. Layoffs are sad and will result in grieving; you can grieve too," says executive coach and Founder/CEO of Reverb, Mikaela Kiner. Not only should you be human first, but it is also an opportune time to be as transparent as possible.
"Share the business reasons why you chose to eliminate certain roles and how you anticipate that [layoffs] will enable the company to survive and eventually grow. While they may not like it, people do understand this kind of logic" says Kiner. "Give remaining employees time to recover from the loss of their friends and colleagues. Too much 'cheerleading' too soon is not empathetic. Once the dust has settled, paint a picture of the new future that people can rally behind. Remind people of the mission, vision, and values that have made the company successful."
In the process of layoffs, try to allow enough time to answer questions in one-on-one conversations. Give people time to pack up their offices and say goodbye. If possible, Kiner says, "Make sure people have information that they can use to manage their stress - EAP, coaching, or mental health support. Don't lay people off on a Friday or before a holiday, when those resources will not be available until Monday."
Offer your support
"Everybody responds to layoffs differently, but it can be helpful to focus on what is in your control," Zhao says. "For helping laid-off employees, that can mean writing a recommendation letter for a laid-off employee or leveraging your network to share job opportunities. For your team and peers, that can mean providing an outlet for your team to express their emotions and concerns or getting a head start on adapting your forward-looking plans."
Consider offering support and professional development resources to outgoing employees to help them transition to new jobs, whether internally or through a consultancy firm.
"Outplacement is a rapidly growing component of a severance agreement that is intended to help employees find work following a layoff or job loss," says Paula Cizek, Chief Research Officer of NOBL, an organizational design firm. "Go the extra mile to help your staff by working to get them into new roles outside your company."
Offering career transition coaching, resume writing, and other services speak volumes about your empathy and values.
Common outplacement services include:
- Professional resume and cover-letter writing
- Personal, one-on-one career transition consultations
- Help with establishing an online presence for job searches
- Optimization of resumes for automated resume screening processes
- Online resume and cover letter posting
- Personalized salary reports
- Individual outplacement support (as opposed to group seminars)
- 24/7 remote support done online
Allow employees a chance to recover
Employees need time to process layoffs. Instead of trying to immediately ramp back up to "business as usual," give them a few days to adjust and ask questions.
"Managers need to recognize that there will inevitably be an adjustment period after layoffs and build some buffer into their plans to allow teams to adjust to the new workload. Trying to get back to business too quickly risks exacerbating burnout and hurting morale," Zhao warns.
To help teams adapt to a new normal, and schedule check-ins to address morale.
Recalibrate the workload
While contemplating how to navigate layoffs and productivity, be thoughtful about how to distribute the workload of the eliminated employees, and make sure that changes to each person's workload are clear.
"In addition to the emotional toll that surviving a layoff has on employees, you have to also be mindful of increased workload requirements," says Joey Price, CEO of Jumpstart:HR, an HR Outsourcing and Consulting company for US-based Small Businesses and Startups. "Set your employees up to win by re-evaluating inefficient processes and carving out clear expectations for performance plus support to get the job done."
Invest in employee engagement and morale
When workers are worried about losing their jobs, it affects their performance. Managers should inspire positive emotions as well as promote camaraderie in their teams.
Alex Azoury, Founder and CEO of Home Grounds, reminds all executives to remember that while culture impacts all of our people, it is the people that make the culture. Layoffs will impact morale and communication can help. "A company-wide address is in order if you plan to lay off more than 10% of your workforce. Don't offer false promises, but if you can genuinely reassure people of their jobs, now is the time to do it," says Azoury.
Encourage your company's culture carriers to support their colleagues as well. "I recommend encouraging staff to network and share alternative income opportunities with each other," says Lior Ohayon, CEO of Hush Blankets. "By spreading the word and providing recommendations, a team can work together to get through a layoff. On top of that, if you're a supportive boss, you are encouraging staff to return to you in better times."
Continue to check in
Turmoil at work or staff reductions are not a "one and done" occurrence. The impact of layoffs will have long-lasting ripple effects in your associates' lives. Managers should listen to employees' concerns. Reassure them with the truth, but don't sugarcoat the situation.
Workplace analyst Cindy Lo of FitSmallBusiness.com emphasizes that managers have to keep the retained workforce feeling engaged. "Regular check-ins are necessary, especially if things get bad. One on one meetings with each employee as well as the entire team can be a huge remedy," says Lo. "If possible, these meetings should be conducted via video call instead of over the phone. After all, face time can be a huge help for people to not feel isolated. While this tactic will increase the number of meetings on the calendar, it's nonetheless necessary for maintaining engagement."
Managers can't predict every situation during layoffs, but they can ensure that decisions and conversations with our teams are filled with transparency, empathy and authenticity.