What to consider when making difficult employee decisions

This article was provided by Mercer

The boss man perspective.

I remember it like it was yesterday. The year was 2000 and I was a business strategy consultant at a mid-sized firm. I had just rolled off a high-pressure, incredibly engaging 8-month project and had helped sell and deliver the largest project our company had ever won. I was not too worried about my job, but the dot-com bust was big and the papers were full of layoff news.

It was around that time that I was asked to meet with our firm’s newly named head of communications to advise her on how to set up an internal communications function. There were four people in a conference room, including one of the founding partners. Just before the meeting began I got a call from a colleague. He was driving around, calling his direct reports to tell them to start looking for new jobs.

I walked into the meeting and asked the question: Are we about to announce layoffs? The senior partner shushed me. “Do NOT mention anything about layoffs,” he said. “We haven’t told anyone.”

“Really?” I said. “A friend of mine is calling his people right now, telling them to start looking.”

“Who?” the leader asked.

“It doesn’t matter — and I’m not saying,” I said. “His boss told him, and he’s just making sure his people don’t get caught by surprise.” Besides, all you had to do was read a newspaper to figure out that bad news was coming.

I wasn’t going to wait for the fireworks. A few days later, I got out. After a short conversation with the CEO of a venture-funded startup, whom I had met at a cocktail party, I accepted her offer to become her head of strategic communication.

Being transparent during difficult times

I hadn’t exactly looked closely before I leapt into that venture-funded startup, and it wasn’t long before I had to think about what we would do if we didn’t get the next round of funding. I had no doubt that a reduction-in-force (RIF) was on the horizon. Download the complimentary 15-step reduction-in-force checklist from Mercer for practical and legal steps you can take when conducting a RIF. 

Many of the people who would be losing their jobs were the same people who had slept under their desks to build the company. I talked with the CEO, and she agreed that I could be transparent with the employees about our financial situation and the potential implications.

I wrote a letter to all employees telling them where we stood. At that point we had enough to continue paying a full staff for another two months; after that, we would have to start cutting jobs. I acknowledged that many of them had families, mortgages, and other responsibilities that might make it difficult to tolerate the uncertainty.

If that was the case, we asked them to let us know, and that we would do everything we could to support them with their job searches, including giving them time during the workday to do what they needed to do.

No one left. No one started to sabotage the company. “Tell day” was sad, but the process was compassionate. Within two weeks of their last days, everyone who lost a job got taken out to dinner by their teams. We wanted to send a message: you lost a job, but you didn’t lose the community you built.

Forging a new approach

When I joined Mercer eight years ago, my change management colleagues were helping clients execute that same secretive process over and over again. I disagreed with the approach, but was nervous about taking a stand since I was new and I didn’t want to alienate anyone.

A few months later, I was asked to meet with the head of a family-owned business that was putting itself up for sale. The business was small, and many of the employees had spent their entire careers with the company. The investment bankers recommended that the employees be kept in the dark about a potential sale until the deal was done.

I drafted a statement of work, as requested, and emailed it to the chairman. Since we had already completed a project initiation agreement, I went to work on a “leak plan,” which detailed all the different types of messages you might need if word got out about a layoff or any other major organizational change before the planned announcement.

After a few days, the chairman called to say he should have given me his personal email address.

“Why?” I asked.

My email with the SOW ended up in the spam box. Someone in IT read the email, realized what it was, and asked his boss about it. The two of them called the chairman and were on their way upstairs to talk.

I sent the “leak plan” immediately, and, as luck would have it, the conversation went very well. The two men agreed to keep the news to themselves until the leaders were ready to make the official announcement. But senior leaders realized how difficult it was going to be to contain a leak, so a couple of weeks later, they decided to tell their employees what was going on.

Information is almost impossible to contain

Hiding information may have been possible in the old days, but it is nearly impossible today. Information is an airborne virus; it moves fast and mutates — way faster than your PR team can spin the tale and way faster than you can assemble your people and escort them out the door.

But that’s not really the point. Why wouldn’t you treat your own employees — the people who chose to work for you, who took your goals to heart and did their best to help you succeed — like a truly precious constituency? Maybe you think business is business and I save my warm and fuzzy sentiments for my family and friends. Maybe you just don’t want to face the unpleasantness of delivering bad news.

Now I’m better at RIFs. Not just because I’ve had more practice (sadly, I have), but the pandemic and all the noise about environmental, social, and governance (ESG) strengthened my conviction and gave me a little more courage to speak up.

At Mercer, we talk a lot about combining empathy and economics. There’s no avoiding the necessity of adapting, reorganizing for the future, and cutting the jobs that no longer enable your success. Even if half your work is done by robots, your people matter. How you treat them will become part of your brand. If sheer appreciation for your workers’ humanity isn’t enough to get you to help them land on their feet, consider the value of your brand and the enormous cost of rebuilding it after a badly managed crisis.

Amid return-to-work, slowing growth and elevated costs, it’s time to think about reductions-in-force. Begin with this complimentary 15-step checklist from Mercer with practical and legal steps you can take to prepare. Download the reduction-in-force checklist now.

Beth Browde is a senior principal in Mercer’s Career line of business with more than 25 years’ experience in organizational change and strategic communication and in building inclusive cultures. She has served as an advisor to C-level leaders across a range of industries, helping them engage and align stakeholders around the strategy, vision, and roadmap to successful transformation.