How to prepare for layoffs?

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How to prepare for layoffs
These things are not new. Businesses go through economic cycles and there are cycles when going gets tough for them. When the going gets tough, well- run businesses are required to take tough decisions involving layoffs.

The current global economic environment is gloomy. Wherever you look the conversations are centred around slowing growth, recession, high inflation, unemployment, and most importantly large-scale layoffs. These things are not new. Businesses go through economic cycles and there are cycles when going gets tough for them. When the going gets tough, well- run businesses are required to take tough decisions involving layoffs.

Regrettably, large-scale layoffs are a fact of life for most businesses. The issue however is that people who are dealing with such decisions are probably dealing with something like this for the first time or they are experiencing it after a long-time and memories have faded a bit.

Being new or relatively new to this is relevant for both sides – whether you are the one doing this on behalf of your business, or you are the one whose job is included in these layoffs. This article is my attempt to share a practical guide to help people who are dealing with this.

There are two parties here and let’s call them ‘employer’ and ‘employee’. The employer here is all those people from business and HR who are actively involved in identifying the jobs at risk, consulting/ communicating this with people at risk, and completing the process within an agreed timescale. On the other hand, the employee here is someone whose job has been put at risk so a recipient of such decisions. Let’s understand this from both Employer and Employee perspectives.

As an employee, being laid off is painful and most people take it personally. People go through five stages of grief namely Denial, Anger, Depression, Bargaining, and Acceptance. It is painful to go through these stages, but it happens to most. Some people if they are not careful may get stuck in the Anger/ Depression stage and the longer they stay in that stage more harmful it is for them.

Therefore, the first and most important thing is to make sure that one does not take this too personally. One must look for solace amongst family or friends. Believe me, this is important for you to come out of this cycle and accept it. It is easier said than done. So practically what one can do to make sure that they quickly go through this process and accept the reality? Here are my thoughts on the practical ideas one could consider:

  1. It is important to converse with someone with who you can speak your heart. Usually, this is your spouse, a family member, or a friend. Find someone and find them quickly so that you can have a heart-to-heart conversation without being judged.
  2. Remind yourself that it is not about you personally. Layoffs are an outcome of commercial decisions that every business must take. It may be hard not to take it personally as you are the one who lost the job whereas your colleague is still there. One way we could look at this is the organisation’s need for your skill/ experience has diminished hence you are being laid off. But you still have skills and experiences that may be relevant to other businesses.
  3. Remind yourself about all the accomplishments and recognitions that you received from your current organisation. This will help you get the confidence that you did do great work and you were appreciated too.
  4. You must be disciplined in terms of your financial security too. As these things are announced, please ensure that you keep financial savings that could look after your expenses for at least six months. This is critical as financial stress would make it harder for you to move on.
  5. Create a clear schedule for job hunting. Don’t be desperate but it is important to be disciplined. Focus on networking and meeting with people in your circle. Most leads from the job come from references so don’t underestimate the importance of networking.
  6. Finally, one should remain physically active. Please ensure that you don’t withdraw from your daily routine of exercise, walking, sports, etc. Staying active is the most important thing for you to get clarity of thoughts for your next move.

Now let’s see this from the employer’s perspective. Believe me, it is not easy for them either. Boards usually authorise a target number but who becomes part of the list that meets the target is a time-consuming and difficult exercise. Business leaders work with their respective HR Business Partners to agree on a selection framework.

For example, if the Board decides not to invest any further in a particular business, branch, or product capability then the selection framework would include anyone who is associated with that business, branch, or capability. Business leaders or their HR Partners who are tasked to deliver on this may be doing it for the first time or it was done by them a while back.

There is a lot at stake in terms of external reputation and the morale of the people who would remain part of the business in the future too. Most organizations have well-established processes and practices to hire people as they do it more regularly whereas the processes that result in the people departing are not regular hence processes are not well documented and tested.

This is extremely important for the business reputation and long-term success to treat departing employees also fairly and reasonably. Here are my thoughts on practical ideas one could consider:

  1. Business reputation is an invaluable asset for the business. Economic cycles change and no business wants to be in a reputation where they struggle to hire people. These days your employees are also consumers of your products and services. They are a powerful brand ambassador, so employees must be treated fairly and reasonably during their employment as well as when they depart. A business reputation once compromised will take many years to repair and sometimes it may get damaged beyond repair too. The reputational risks, therefore, are an important consideration for layoff decisions.
  2. HR/ Business leaders must ensure that the communication of the rationale behind layoffs is clearly articulated. The reasons need to be clear, honest, and compelling. This is the foundation of the exercise and the team must give it the most time to get it right and compelling. It is important to centralise this part of the exercise so that there is consistency in the message across the organisation.
  3. The layoff messages are painful, so business leaders must communicate this with respect and compassion. The leader must set out the business context that led to layoffs and other actions that the company is taking. People should be able to relate to the business context and appreciate that the layoff is not the only action company is taking.
  4. It is also important for the business leader to call out how the planned actions including layoffs will positively position the company for the future. The positive hope for the future must be there in the messaging otherwise people could conclude such actions as only the first step and more negative actions to follow. Such a conclusion by people would distract them and seriously compromise the future stability of the business.
  5. Leaders must articulate what help and support be provided to people who are impacted by layoffs. The summary of such support must be openly shared with all employees. The company must consider including support such as external networking, counseling, outplacement, etc.
  6. Finally, it is important to be consistent in your messaging across the organisation. Such messages are painful and empathetic communication can help reduce the negative impacts on both those who are departing and those who are staying.

To finish I would say while layoffs are part and parcel of business life, and these are painful for both employers and employees but there are practical ideas that can be considered to reduce the negative impacts. We hope you find our thoughts on practical ideas shared in the article useful.

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