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Employee Layoff and Trust

Key Insights on How to handle Employee Lay offs

handling employee lay-off

Employee Layoff – How Best Workplaces handle tough times while sustaining Trust

Euripides quotes, ‘Good friends show their love in times of trouble, not just in happiness.’ The best way
of strengthening any relationship based on trust is to demonstrate care for the other person when it is not the most convenient. This is especially true when a company decides to layoff its employees for cutting costs. Similarly, employees will always remember how the organization and leaders behave in the face of adversity (like employee layoff) and this can lead to life-long advocacy or negative word-of-mouth, just as easily. As Great Place to Work® Institute works with a plethora of organizations annually in India and across the globe, we share some learnings from how the best workplaces sustain the trust even while taking tough decisions on employee layoff:

Explore all options before laying off employees:

Best workplaces and their leaders ensure that they leave no stone unturned, to steer the company through this phase, before considering severe measures like laying off employees. The top management team of an Indian Great Place to Work–Certified™ company from Kolkata decided to hold their own salary disbursement, in order to ensure that the salary of all other employees could be paid as soon as possible. Apollo Tyres has instituted a robust Planning Cycle that stems from the company vision/mission. The Planning cycle is for the Mid-Term as well as setting up sharp priorities for the year in the Annual Business Plan to ensure that most outlier points in the external environment are seen through and risks emanating from them are mitigated. Last year, they explored options of not hiring flexible manpower during short shutdown periods but did not contemplate layingoff employees. Similarly, VIP Industries reduced the workload which is otherwise outsourced to thirdparty vendors to ensure that the consequences of slowdown do not impact their employees. They also drove cost-consciousness within the organizations on travel and other expenses by leveraging technology internally.

employee motivation

However, if you do have to lay off your employees, here are 5 Ways to do it with utmost sincerity and empathy.

Communication is vital while laying off an employee:

The importance of frequent, transparent and proactive communication during employee lay off cannot be emphasised enough. Consistent communication to keep employees apprised about the situation and the plan for the future, even if it is bad news, will only help build the trust. As Patrick Lencioni says, “The only way to build trust is to overcome our need for invulnerability.” When the organization transparently shares where it stands and how it is planning to move forward, employees will appreciate the honesty and the reservoir of trust in the workplace will only go up.

Example: MD’s Monthly VConnect Live Broadcast – VIP Industries Ltd.

The MD’s monthly V Connect (town hall)sessions are now held through a live broadcast.These sessions are aimed at reiteratingoptimism and clearing any misconceptions,rumours or fear of employment prospects.They constantly highlight the positives andopportunities like being market leaders,continued profitability, etc., while also
communicating business challenges. They resorted to the Black Dot Adage –as organization & teams it is important toappreciate & see the ‘white canvas’- and not befocused or discouraged by the black dot (the economic scenario, impact on sales, etc.)

Respect and demonstrated caring during employee layoff:

Maya Angelou said, “People will forget what you said,people will forget what you did, but people will never forget how you made them feel”. Ensuring that theorganization demonstrates respect and care for their people even when they need to take tough decisionsis what differentiates the best from the rest. One of the organizations that undertook the GreatPlace to Work® Journey Giftwork® intervention for its people managers, underwent businessrestructuring that required laying-off employees incertain verticals. A manager from this organizationshared his story of how he personally discussed and explained the situation to each one of the employeeswho were being laid off from his vertical, not just his immediate team. In their notice period, he helpedthem with their resumes and forwarded the same to his professional network. He was in touch with mostof them even after they left the organization and all these employees called him to convey their gratitudewhen they got placed elsewhere. He said that “He has little power to change what the business decides,but nothing will stop him from practising Giftwork®, especially in situations like these!”

Involve employees in driving change

As we know, one needs a whole orchestra to be ableto hear the symphony. Involving employees and especially your best performers to share ideas andsuggestions that can help the organization ride the tides can lead to business success as well as highengagement in employees.

Emotional support and severance benefits during laying off an employee builds trust

When an organization undertakes production-cutsor retrenchment, other than the financial supportand benefits, emotional support to the employeebeing let-go is also crucial. Organizations are now extending counselling services for such employeesto help them acclimatize to the situation and start afresh. Many organizations help employees withoutplacement post their lay-off by leveraging their networks. One such instance is of a Manufacturing andglobal mobility solutions provider that underwent significant restructuring in 2018 and as responsibleemployers, went an extra mile to make sure the restructuring communication was unambiguous andseamless, and all employees were well looked after. They consciously put themselves in the laid offemployees’ shoes and came up with a detailed
separation plan that included a tire-out period, anhonest and transparent communication plan and included a minute by minute plan of action. Theytook the employees to an external venue to take them through the proposed plan of action and theiroptions in detail. Where most organizations think of protecting themselves during such difficult times,their priority was to ensure their employees felt secure and any fears and doubts were adequatelyhandled. Doctors and counsellors were also arranged to ensure that the layoff process took place without any safetyconcerns and the physical and emotional well-being of employees were also attended to. All affectedemployees across corporate as well as shop floor roles were given the opportunity to speak, share theirapprehensions and be informed about the various
options offered by the organization. Moreover, tomake things easier, they voluntarily handed them payslips in advance (6- month salary slips) withtheir experience certificates and helped them with outplacements to make things easier for them. Veryoften such layoffs lead to dispute and disgruntledemployees, but their elaborate restructuring planand packages and seamless communication forall employees ensured 100 % compliance with nocomplaints. None of the employees appealed or tooklegal recourse signifying that they were content withwhat they were offered. They have already rehired5 people and doors are open to all their formeremployees once the right opportunity comes up.

Keep in touchwith your employees post their layoff:

Most companies provide layoff benefits, butto build trust organizations must go beyond andextend their connect with the employees evenpost-layoff. Organizations have initiated policiesof giving retrenched employees a preference inre-hiring post their layoff when the dark clouds roll away. They havecreated alumni communities where they keep intouch with all their ex-employees and provide themwith a network where they can also reach out for helpand vice-versa.

-Great Place to Work® India

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