Preparation for Lay-off’s
Recently it seems as if layoffs are everywhere you look – on the news, on-line and sometimes only a phone call away. Another colleague of mine was laid off and was extremely devastated by not only his loss of a job, but truly loved the company he was working for. Unfortunately, this is shaping up to be a common occurrence this year. The statistics on unemployment are the highest they have been in years.
As an employer, it is your job to look out for the best interest of the company even if that means laying off key employees. If you are faced with this quandary, I am sure you are trying to figure out who to lay off when and how.
Who do I cut? This often requires an evaluation of job descriptions and duties in your organization – big or small. Who can you live without? Now if your answer is “no one,” you need to further analyze. Some guidelines I have always used when working with employers of all sorts and sizes are: Who was the last one hired? Who makes the highest salary? Who has a broader skill set and/or can do more than one job function at a time? Who can pick up the slack in a leaner organization?
Sometimes a layoff can be avoidable, but requires thinking outside of the box. Many companies have stopped their 401K match programs, scaled back on hours, cut office supply costs, changed full time employees to part time employees so there is no minimum hour requirement, freezes on raises and bonuses, and closed their businesses on non-peak days/times (etc). Another option may be to evaluate the overall impact of saving a job and applying a salary cut across the organization – 5 to 10%, depending on savings.
I find that most employees these days are just happy to have jobs and given the choice, would rather keep their job at a slightly lower salary to make it through the recession with a job. Finding a job right now isn’t the easiest and that is an understatement!
When do I do layoffs? This is reflective of your business demands. There is really “no good time” to lay someone off. I try to do layoffs at the end of pay periods and the beginning of shifts. I also try to do them all at the same time, because as you know word of mouth is going to travel – QUICK! I also try to bring the remaining staff together afterwards to answer any questions they may have and to make sure we are all on the same page moving in the same direction going forward.
How do I do layoffs? This requires advance preparation.
You will need their final check(s) with their hours worked up until the day of the layoff. This includes any bonuses and commissions owed.
Depending on your company policy and state laws, this also includes remaining earned vacation time and sick days where applicable.
A termination document signed by you and the employee stating the reason, date and any other pertinent information should also be prepared and ready to go ahead of time.
If you are giving them severance pay, this should be prepared ahead of time as well.
Information about benefits and the continuation of coverage is another piece to remember: including when their benefits will end and when they will receive their Cobra paperwork where applicable. Often times your Cobra carrier will prepare this ahead of time for you to present at the termination.
A list of items you need back from them: keys, cell phones, computer (etc). This is also something that I would recommend signing off on if it is not part of the actual termination document as referenced above.
All company files, passwords or other company information or documents the employee may have.
Information on state unemployment and filing instructions.
Terminations in companies are inevitable, especially when it is because of an employees misconduct or own doing. Even after all of the many companies I have worked with/for, temporary and permanent layoffs are still hard each time. My approach is to always be prepared, sincere and understanding, because the truth is – there is a possibility that it can happen to anyone of us at any point in time.
