How to properly handle layoffs

‘When you do it quickly, you contain the rumour mill’

How to properly handle layoffs

Bell Media recently made news when it let go dozens of employees, and complaints were made about the process. The company was accused of not providing full details and some employees “were actually feeling that they’ve been a part of a prank because they were told in 90 seconds that their 11-year career had come to an end,” says Nita Chhinzer, associate professor in human resources management at the University of Guelph in Ontario. 

Pre-pandemic, when employees were laid off, many could rely on colleagues to process the information.

“Usually when something like this happens, we can go back to our social support network, those meaningful relationships that we have at work, and just detox a little bit before we continue on,” she says.

“[Now] we get this news and we have to deal with the aftermath that we’ve lost our jobs in isolation, at home in our personal space, without an opportunity to leverage off of our relationships and to talk to our coworkers and to process through some of that grief.”

Best practices for layoffs

So, what are the best ways of carrying out layoffs while trying to maintain loyalty and engagement with the remaining workforce?

The first step is doing it rapidly and efficiently.

 “When you do it quickly, you contain the rumour mill because there’s not a slow and steady spiral into layoffs. People are all informed on generally the same day and you move forward,” says Chhinzer.

“The research does suggest that we shouldn’t have lingering layoffs that take weeks or months to complete because we’ll introduce job insecurity and potential for decreased productivity and increased turnover intentions amongst staff that would be remaining.”

Nita Chhinzer

Supervisors should be provided with detailed information about upcoming layoffs and exactly when they will happen, she says.

“HR and managers are in a Catch-22 situation because they’re feeling a lot of job insecurity themselves at the same time their employees are being laid off, but if you put them on notice that they may set a followup meeting with the individual employee or to have that employee reach out to them so that they can engage in the required conversations [that can] improve perceptions of equity and fairness.”

Employers should have information packages prepared well in advance to make the process that much smoother, according to Chhinzer, who is also a member of Canadian HR Reporter’s advisory board.

“If you are going to conduct mass layoffs, you have forms in place and support in place, including accessing the EAP and information about that for your employees. You should have a package that clearly outlines the dates for the ROE, how long benefits will last, vacation payout, severance payout, when the last day of work would be as well as procedural and operational issues including when technology will be cut off [and] how we return our laptops and our work-related materials.”

The package should include the broader reason why the company engaged in layoffs, she says.

“[Was it] because there has been some external change in the environment around it? Was it because we lost the contract? Was it because we’re not profitable and we’re trying to reduce costs? Providing a base level explanation to employees about the reason for the layoff is quite critical.”

Common layoff mistakes

A frequent misstep companies have made during the layoff process is providing the wrong reasons for the decision, which can be problematic, according to Chhinzer. That could include personalizing the concept by saying, “The reason why you were selected over your coworker is because you’ve been consistently late or you had poorer performance.”

That triggers a dismissal rather than a layoff because it’s “masking a dismissal under the concept of a layoff and [you] should not be doing that, that’s illegal,” she says.

“There may be in the future a wave of wrongful dismissal lawsuits due to the process of how these layoffs have been executed and the lack of opportunity provided for the individual employee to ask questions during that meeting ― but that’s yet to be determined.”

Another problem? Not taking care of those left behind.

For HR departments, it’s crucial to combat “survivor syndrome,” she says, which ranges from mistrust of management to negative attitudes about the employer and sabotage, along with “decreased productivity, increased turnover intentions ― a whole range of negative psychological attitudes,” says Chhinzer.

Instead, focus on telling the remaining workers “We’re really happy that you continue to work and that you continue to power through these assignments that we’ve given you or you meet deadlines, or you’ve been able to maintain a strong relationship with your client,” she says.

“Giving positive feedback to your survivors is critical to let them know in this increasingly complex situation.”

And contrary to popular thinking, voluntary layoffs are not the best way to handle employee reductions, she says.

“The research that I conducted actually shows that it is stronger performers who volunteer for a layoff and poor performers are generally the ones who stay behind. The rationale for that is stronger performers feel that they are more likely to get a job in the future so they will benefit from the severance package. They will exit the organization with confidence that they’ll be able to secure a job in the future because they’re labour-market ready and they’ve got highly marketable skills, which in the longer term is detrimental to the organization.”

Canadian HR Reporter has also heard from experts about changes to ROE rules because of COVID-19 and temporary layoffs.

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