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Layoffs… How Do I Lay Off Employees?

Written by: Betsey Nash

Article Overview: Layoffs... Employers ask, "Where do I begin? What do I say (or don't say)? What kind of documentation do I need? Are there rules to this process?" Betsey helps walk you through this process... a process nobody likes.

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Layoffs… How Do I Lay Off Employees?

The first phone call I received from a client when I moved my business to the Central Coast came through late on the Sunday night after Thanksgiving. “I need to fire my ex-brother-in-law!” he cried. The client had “just learned” of inappropriate use of the office computer – I mean really inappropriate use – and he was in a white hot fury to be rid of the guy. I won’t belabor the gory details, but the discussion started with: “What does your Employee Handbook say?” and it went downhill from there. “What handbook? What policy?” “Can’t I just fire him? Aren’t I an ‘at-will’ employer?”

I bring this up now because every December and January we see much discussion of new laws, pending legislation, and expectations for the New Year. For 2009, in employment law (especially at the federal level) we expect to see new employment legislation like we haven’t seen in over a decade. The last major piece of employment legislation was the Family Medical Leave Act in 1993. It’s already been changed significantly and employers would be wise to check with their HR consultants or counsel to discuss the impact it and other laws will have on their business when the changes go into effect mid-January 2009.

This is the time of year to update and revise your Employee Handbook to reflect law changes and changes in your corporate culture, as well.

But one thing employers haven’t had to think about much in recent years is: “How do I lay off employees?” And “How do I handle morale when my employees are afraid they’ll lose their jobs?”
Again, I ask: “What does your Handbook say?” Do you have a Reduction in Force (RIF) policy? A RIF policy designates the criteria the company uses when laying off workers due to business needs, as opposed to performance, safety, or other issues. Do you let newcomers go first? Poor performers? A percentage from across all departments? How about family: Are they sacrosanct (except for really inappropriate ex-brothers-in-law?).

A good RIF policy will clearly state the criteria used in deciding who goes and who stays, and will leave some flexibility for the company to respond to its business needs. This is, after all, the whole reason for the reduction. Some sample criteria are:
1. Company work requirements;
2. Employee’s abilities, experience, and skill;
3. Employee’s potential for reassignment within the organization; and
4. Length of service.

By naming several criteria, the employer is given the flexibility to evaluate each employee’s value to the business. Notice that “John Doe is a pain to work with” is not a valid criterion. Neither is “We were looking for an excuse to get rid of her but we didn’t have any documentation to back it up.” No fair cheating here.

When providing notice to the employee being laid off, it is always a good idea to be honest, but not wordy. “As you know business has slowed down and we’re to the point where we need to lower our payroll expenses: your position is one that we can merge with another, so we have determined that we have to let you go.” Simple, clear, no drama. Of course, that was the easy part: now they are going to ask you why they were chosen over the guy that has the position theirs will merge into. “Why me?” Stick to your stated criteria: now is not the time to bring up some performance issue they have not heard about ‘til now. Now is not the time to say something specific they might argue about. The time to address performance and attitude issues has passed.

Remember to tell the employee that being laid off does not mean they will be called back to work when things turn around. There are no re-call rights outside of union employment. This is an oft-misunderstood issue. It is only fair to tell the employee that they should not expect to be called back, that they can reapply any time they like and, depending on the needs of the business at the time, they might be asked to interview.

I know this is hard: you’re not mad at the person, they aren’t your ex-brother-in-law, they haven’t violated some critical policy: it is just business. And, again, in your desire to soften the blow or assuage your guilt, don’t run off at the mouth. Stick to your script.

Now, about morale: Fear is a powerful motivator and a distraction. Those employees left standing may feel guilty. What they should feel is valued and needed. But they will be chatting at the water cooler. This is why it’s critical to let everyone know when the RIF is over, and that the stated criteria have been followed. Fear is powerful, and so is fair.

Keep the employees in the loop; let them know how important they are, and how important their performance is to the health of the company. It is a cliché, but I still believe it: your employees are the key to your success.

Betsey Nash, SPHR
United Staffing Associates
HR Consulting Division

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About the Author: Betsey Nash
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Betsey has over 18 yrs exp. as a Human Resources generalist & over 20 yrs exp. in management. Prior to merging her successful consulting firm, NASH HR SERVICES with UNITED STAFFING ASSOCIATES, her experience included 10 yrs in HR with The Home Depot before being recruited by Bed, Bath & Beyond to be District HR manager for the busy San Fernando Valley. Since 1983, Betsey continues to be a popular teacher of classes in management, human resources & communication for professionals in business & academic settings. She holds the national certification of Senior Professional in Human Resources & was the President-Elect of the Human Resources Association of the Central Coast, both attesting to her expertise in the field. For assistance with any of your HR needs or questions, please use the following link: http://www.JustAskUsa.com.

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