In my 30-year career, I’ve seen layoffs handled both brilliantly and disastrously. Mishandled downsizing has resulted in a great deal of anxiety, suffering, and humiliation, and has frequently prompted fired employees to retaliate through the legal system, as well as by violence, theft, and sabotage.
The Current Culture
As reports of mass layoffs become more common (including notification via e-mail, text, or voicemail), I’m reminded that even the most well-intentioned employers can get caught up in “left-brain” layoff planning as they consider who, what, when, and where to cut, as well as legal compliance box-checking. They overlook the emotional, psychological, and human aspects of removing someone from their work. Those who remain in the organization (often referred to as “survivors”) are generally ignored.
This is a tough time to be an employer. The most recent round of layoffs announced by major companies around the world provides a continuing perfect storm for employers that face record levels of employee litigation and heightened employee stress and anxiety. All of this comes amidst a lobal pandemic and continuing difficult economic environment.
Downsizing with dignity isn’t just good for lawsuit prevention, it’s good for business. American workers don’t have a strong tolerance for insult. They do, however, have a remarkable capacity to absorb injury. Preserving their dignity when letting them go separates injury from insult.
Employer missteps often include:
- Keeping employees in an information vacuum, leaving them anxious, confused and prone to negative speculation. Examples include workers at a production facility who became convinced—erroneously—that they were about to be replaced by robots. Other examples include star employees taking jobs elsewhere because they wrongly thought they were next to go. This scenario once prompted an executive to exclaim to me, “Before I would have laid them off, I would have laid myself off!”
- Making efficiency the number one factor in informing employees of their pending discharges. Examples include large, impersonal “discharge meetings,” and group email messages such as, “We regret to inform you that today is your last day of employment.” Some employers have even resorted to using the company’s computer security system. Imagine learning that your job’s over because you can’t log onto your computer! Or, your badge to gain access to your workplace is not working.
- Allowing an unwarranted fear of sabotage to govern the exit process. Examples include long-time, loyal employees marched out of their building by security personnel, carrying boxes of their personal belongings and passing before surviving co-workers.
These approaches to downsizing don’t work very well, unless you measure effectiveness in terms of efficiency in “getting this over with as soon as possible.”
By contrast, employers that incorporate respect and dignity into the downsizing process do such things as:
- Letting employees know early on about what’s happening with the company’s business and the potential impact on the workforce; inviting employees to ask questions and raise concerns in order to keep them in the loop and remove guessing or speculation.
- Creating a severance plan that may not be especially lucrative due to company finances, but which provides a tangible economic benefit to terminated workers and an intangible but important gesture of management’s compassion and understanding of the impact of the termination on them.
- At the time of discharge, giving employees options on how they want their exit handled, including when and how to collect their personal things, say their goodbyes, and depart with as much grace and dignity as possible.
Positive results include experiences like that of a general manager whose concrete plant was soon to be shut down in a company restructuring. The general manager got a telephone call from an amazed customer who’d been treated extremely well at a construction site. But that wasn’t the amazing part. As the customer explained to the general manager, “I couldn’t believe how hard your guys worked and how well they treated us knowing they were losing their jobs in a month!”
With employee litigiousness at an all-time high in the last few years (the federal Equal Employment Opportunity Commission reported a 30 percent increase in age discrimination and retaliation claims in 2018, and predicts a record number of new claims in 2020), downsizing with dignity is clearly the smart legal thing to do. It’s also the right thing to do.