TV Tie-in: layoff best practice

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From RIM and Motorola to Cisco’s July announcement – mass layoffs seem to be a normal occurrence these days. So how can you best manage those leaving, and those left behind?

Layoffs use to be based on poor performance: it was intended as a way to cut costs. Then, in the 90s, strong performers started downsizing too. Now it’s a way of life for some businesses, Dr Nita Chhinzer from the University of Guelph said.

As companies change focus it can sometimes be cheaper and faster to layoff an employee with a skillset that you don’t need and acquire a new employee, instead of engaging in time consuming and expensive training and development on the existing employees, Chhinzer added.

See also: HRM TV: best practice for managing layoffs

However, it’s not always as successful as expected. Few organizations get the profit margin improvements they expect and part of this comes down to loss of productivity as the “survivors”.

“The people who stay often have a massive volume of work to do, they are feeling guilty about friends who have left and they’re unsure about their own jobs,” Chhinzer said. “That leads to management mistrust and a drop in productivity which impacts the financials post down-sizing.”

She offered the following advice for HR:

  1. Be fair: “In the eyes of the employees there needs to be this concept of procedural justice.” Keep the process consistent across departments and  keep workers  informed about the methods being used to decide who stays and who goes. Any feeling of unfair treatment will lead to mistrust, and disengagement.
  2. Be transparent: “Rather than leaving it up to people to deduce the reason, it’s good practice to be clear.” If you’re outsourcing, changing focus or trying to cut costs, let employees know. They’re also more likely to be committed to help turn around the company if they understand the reasons – and if you take the power out of the rumour mill.
  3. Communicate: “It’s important to communicate timelines, goals and allowing employees to ask you questions.” Going hand in hand with transparency is communication. If you don’t know the answer to  employee questions just say so, but it’s vital to maintain two-way communications and a feeling of openness and accessibility.
  4. Heal: “After any major change at an organization we have to look at those who survived the layoffs not as the champions, but as those walking around scarred.”
    Insecure, not trusting and potentially disengaged – it’s time to renew these workers’ energy. Continue to celebrate the good, keep up the Christmas parties and family barbecues. Maintain education and training so your staff feel confident that you are investing in their future with the company.

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