Effective layoffs and redundancies by HR
I've heard this type of scenario many times. Employee is performing well, enjoys the job, and is apparently delivering on all expectations set by "The Company".
Then whammy. HR calls them to a meeting, tells them their job is redundant, effective immediately. The employee is offered payment in return for their silence and signing of indemnity paperwork, and is walked out the door. The Company has met all its legal obligations and the now-former employee has the benefit of some unexpected cash and freedom.
In reality though, the employee is invariably left shocked, dismayed, hurt, and utterly bewildered. Pick any of the classic stages of grieving, and nearly all laid off employees will feel one, or more of them. Devastation wipes out any "benefit" from this ambush approach, and whilst some can quickly dust themselves off and continue with great career success elsewhere, there are many that cannot, with far reaching consequences. When work is so closely tied self identity and success and is a tangible measure of our worth and contribution to family, community and society, this extremity of response to losing a job is understandable. Many liken the impact as similar to experiencing news of an unexpected death or divorce.
Of course there are many countries where the redundancy ambush scenario is unthinkable; where unions and works councils just don't allow an environment for job loss to happen with zero advance notice. But there are also many mature markets (including the USA and UK) where this is absolutely possible, and it is not uncommon practice.
And it's got me thinking. As HR professionals, why do we ever take this ambush approach, given the impact it has on a person's personal life, career, and general well-being? What message are we sending to the remaining employees from whom we expect loyalty? What is the impact on a company's consumer brand? Are we really so worried about dispute risk or adding to our own workloads that the “instant amputation” of a settlement agreement is the safest course of action? Where is the common decency and courtesy and professional respect in this methodology? Does this directly contradict the organisation’s promoted value for employees? What is the up-side exactly?
Employee relations during layoff and redundancy
I hear some of you protesting, that all you can do is act upon the demands set by The Company and/or the business leaders you support. That you may not like doing the "cold-hearted terminator" deed but you have no choice under pressures coming from above. That “with instant effect” ” is the "cleanest" approach to avoid protracted hassle and emotion, and to mitigate dispute, escalation and/or litigation risk.
But taking such an approach, surely makes a mockery of our personal and professional values, and perpetuates the “HR is only good for hiring and firing” myth? And as for corporate values - whilst "The Company" may have met its legal obligations, is there not a moral obligation for a little humanity and care that should be also applied?
Ask yourself now - do you really and truly understand the full impact of this approach on the employee you're about to exit? And on the message it sends to everyone around them, and around you? Do you remember how it felt if it happened to you or someone you're close to? Have you ever made the effort to seek out someone who has been ambushed with redundancy, to gain an inkling of its impact on their life?
“It was like a punch in the gut. I didn’t see it coming. I was told, and then I was walked out of the office so didn’t even get to say good bye to my team or colleagues. It’s hard to be positive for my family and in my job search when I’m going out of my mind with worry. ”
“I was laid off by email from the HR Director. It’s been 2 weeks now, and I still don’t know what the process is. Nobody at work is returning my calls. Do I get any references or can they help me with job seeking or papers for the unemployment benefit or what else do I need to know....?”
“When I got the news I was shocked. And then immediately scared. The markets were not good, so getting a job would not be easy. I was no longer single, I was about to be a father, and how could I afford our mortgage payments, the car loans, the insurances for our doctor and hospital bills?”
“It feels like a dream. I finished up a great meeting with some clients, and then my boss came in and told me not to come to work the next day, my job was finished. Just last week I got a company award and this week I’m laid off?”
“I feel like a failure. In my mind I keep replaying over and over - what did I do wrong, how had I messed up, who hated me so much to pick me out for this? I’ve stopped eating and have been avoiding my family and friends - I’m too embarrassed to admit I’ve lost my dream job.”
“I thought my boss was off sick this week, but I just got an email from HR - she’s been made redundant. I don’t understand - she’s a great leader and I didn’t even get to say goodbye. It’s all so cold and seems petty and mean. ”
In a perverse way, I wish every HR leader could be made redundant twice, ideally early in their careers. I’d like them to experience a well handled and respectful event, and an ambush event, just so they can experience first hand how the communications and process management results in a very different employee experience. Hopefully this would help them to be better HR professionals. I wish more time was spent in developing the coping ability of HR professionals to effect layoffs and redundancies - training is typically done on the process and compliance aspects, but not on the authentic empathy nor personal resilience required so I see too many HR leaders who “burn out” after managing high volumes of layoffs and/or managing these repeatedly over long periods of time. I also wish we’d stop inventing fancy terms for these events - we can reference downsizing, rightsizing, restructuring, transformation and all the rest, but to the affected employee, it is simply “job loss”.
I know a HR leader who has effected countless restructures and layoffs over too many countries and too many years within his multi national employer. Along with his team they have effected many thousands of redundancies. Despite an environment with aggressive works councils and unions in place, he and his team have been able to manage these processes with minimal cost and time. They have maximised dignity and "face saving" for the exiting employees, and avoided shredding the company brand. The secret? He has always been adamant that all employees being laid off, be treated respectfully at all times and that the layoffs happen with no surprises. He has convinced all of business leaders of the benefits of strong advance communication of the company's intent, which means that when redundancies do need to be made, they never come as a surprise to the affected employees. The HR function is not 100% responsible for delivering bad news about job loss with business leaders instead taking accountability for messaging to their own teams wherever possible. Which also means business leaders think more carefully about the “who, when and why” for people losing their jobs. Kudos to this HR leader for showing that redundancies can be handled well.
Tips for HR leaders taking the settlement agreement approach to redundancies and lay-offs
Ensure the redundancy decision is communicated to the employee by a person. Ideally their immediate boss, or at least by an experienced HR leader. A face to face meeting isn’t always possible, but a video conference call has to better than an email, a phone message, or something coming from a faceless administrator. Don’t be cowardly in sharing bad news.
Share some context to how the decision was made. No company will admit that mismanagement has caused a need for slashing overheads and that exiting an employee is the fast way to get cost savings. But you can share market issues, loss of key contracts, trends for reduced profits and share price concerns, adoption of new technologies - and then share some insights as to how you went through a considered and fair selection process to arrive at that particular person needing to go. This should be a one or two sentence of fact, rather than a long winded explanation of justification.
Explain the process and paperwork - what you will be supplying inclusive of payments, references, paperwork for tax authorities, etc; what announcement will be made to the organisation/colleagues/direct reports/clients . It is often useful if you can provide a copy of the wording, so the staffer can see any praise/regret/respect that you are applying.
Offer outplacement support and/or time with a counsellor and/or time with a financial planner.
In the event that you have mass layoffs to effect, you could create and provide a comprehensive job seeking advice pack and/or offer an invite to a weekly (or monthly) job seeking advice webinar hosted by your company and/or have an arrangement with non competing companies who may have an interest in taking on your leavers.
Share any other internal jobs immediately that you think the person might be suitable for BUT also manage their expectations carefully eg: we have an opening coming up in the sales team, but xyz skills will be needed so you’re welcome to apply if you’re prepared to do abc to get those skills developed?
Offer time for a follow up call in 1 week and 1 month - the staffer is bound to have queries and/or will want to vent and/or will want job seeking advice - you can afford to donate 15 minutes of your time to help them feel valued (anecdotally we hear that the take up rate for these offers is very low, but that the offer is appreciated all the same).
Confirm that this decision is final, that it has come about because of circumstances outside of the person’s control, that they could have done nothing differently.
Confirm timing for cutoff of their email, return of equipment, payments, paperwork, announcements of leaving.
Confirm what if any (and when) contact should happen with others in the company, after this meeting.
Be human. Tolerate some tears, some venting, some stunned silence. You’re not the one losing your job, so you can afford to tolerate some personal discomfort, especially if it immediately can help the shock of the people being laid off. Don’t put yourself at risk, don’t accept bad behaviour, but do remind the person of what he/her is particularly good at and what they could offer to another employer as a result.
Give the person a document that confirms the relevant points above - many times employees are so shocked at the layoff news, that they don’t actually register much of what was said after “Your job is gone”
Consider sending a thank you or goodbye & good luck card and gift to the employee’s home - especially when the card can be signed by colleagues if there’s been no other chance for formal goodbyes. Aside from being a very human touch, its a nice way for the employee to get some closure rather than hoping the whole situation has been a mistake and that their boss will invite them back.
Unfortunately, layoffs and redundancies are now a regular occurrence in the business world, often seen as the easiest and fastest way to cut costs regardless of the longer term costs to the company (which are well summarised in this separate Harvard Business Review article). For some people, being laid off or made redundant has become a “normal” rite of passage or battle scar that they accept and shrug off. For some its a blessing in disguise that gives them an escape from a job they tolerated, but should have left years ago to pursue happier endeavours. For others though, losing a job, through no fault of their own, is a traumatic event, even when it has happened before.
Taking an immediate settlement approach, whilst not ideal, sometimes really is the only course of action to HR leaders, Employment Law specialists and Employee Relations experts. From what I’ve seen however, the “ambush layoff” is too often used because of cowardice, lack of skill, and lack of empathy from the person tasked with informing the affected employee. Shame on the HR executives who allow this to happen to staff who have lived up to their part of the employment contract. Even more shame when the events are timed right before key holiday periods like Thanksgiving or Christmas. And further shame to those HR executives for blaming this on the faceless and intangible will of "The Company" rather than admitting to any part of their own in the decision making process.
Shame, shame, shame.
About the Author
Leanne Morris is well known as a both an outspoken advocate and critic of the HR profession. With long standing networks across 94 countries in all specialist areas of the function, and a multi- continent work history, she is a sought after subject matter expert on international HR hiring trends and HR hiring best practice.