How To Handle Layoffs: 5 Smart Strategies

Layoffs are a difficult and sensitive situation for any company. Whether due to economic conditions or changes in the business landscape, though, layoffs can have a profound and ongoing impact on employees and your workplace culture. It is important for companies to learn how to handle layoffs in a professional and compassionate manner to minimize the negative effects on employees who are leaving (and those who are left behind). Doing so can improve employee retention and engagement when your company moves forward.

Because every industry is different, each company may have an idea of the best way to handle layoffs. Here are five tips to make things go more smoothly for employees who are laid off and those who are there to pick up the pieces after.

1. Be transparent

Communication is key when it comes to layoffs. Being transparent about the reasons for the layoffs, the process for determining which employees will be affected, and the support available to affected employees can help alleviate fear and uncertainty.

And transparency matters for employees who aren’t being laid off, too. An estimated 48% of employees in the U.S. worry about being laid off, and 74% of those who are left behind saw a dramatic drop in their productivity. Laying out how decisions are made is a scary but necessary part of the process.

2. Offer support

Providing support to affected employees can help them transition to their next job. This could include offering:

• Outplacement services
• Resume writing workshops
• Job search assistance

Support also includes recognizing that laid off employees are leaving behind not only coworkers but friends. Be sensitive to the struggles they may be experiencing during this time.

3. Provide notice

Approximately 66% of layoffs occur with zero notice. This is not only cruel and heartless, but also disruptive to the entire workplace.

While emergency situations may arise, providing employees with as much notice as possible can help them better prepare. This includes training remaining employees and giving laid-off workers space and time to find another job (or even file for unemployment benefits where appropriate).

4. Consider alternatives

Before making the decision to lay off employees, consider alternatives such as:

• Reducing hours
• Implementing job sharing programs
• Implementing a hiring freeze
• Offering early retirement packages
• Offering exit packages for employees who volunteer to leave, if possible

These alternatives may not always be feasible, but it is important to consider all options before making a final decision. It’s also important to be transparent about these alternatives so employees are empowered to make decisions about their future.

5. Treat employees with respect

It is important to treat affected employees with respect and dignity. Offboarding an employee during a layoff with respect can ease the transition and make it as easy as possible for all concerned. This means providing employees with clear information about their severance packages, benefits, and any other support available to them.

It also means recognizing the personal toll a layoff can have and treating employees with respect and dignity throughout the process. Doing so will help you avoid a stream of negative Glassdoor reviews, public reputation issues, or disengagement among your remaining staff.

Improving workplace culture after layoffs

The tension in a workplace that has just experienced layoffs is palpable. Knowing how to lay off employees is just the first step. Now you need to rebuild your workplace culture — sometimes from the ground up. Here’s how.

Lead with positivity

While you should acknowledge the painful layoffs that just occurred, it is important to move forward with positivity. This should not be a false sense of sweeping everything that’s difficult under the rug.

Rather, focus on promoting a culture of open communication, fostering teamwork, and encouraging personal and professional growth. Lead with context, explaining how the layoffs will allow the company to get back to stability in the future.

Further, ensure that you remain committed to supporting your employees’ mental health. Encourage their use of mental health benefits or employee assistance programs during the transition.

Promote employee engagement

Remember that 74% drop in productivity? It is safe to say that employee disengagement is common after a round of layoffs. But employee engagement is key to a positive workplace culture.

It can be hard to encourage employees to take an active role in their work if they believe they could be part of the next layoff. Start by providing opportunities for employees to share their ideas and experiences — even the difficult ones. Giving employees a voice can immediately improve workplace culture.

Managers play an important role here, too. Those who stay visible and approachable (instead of cowering in their office, fearing reprisals) are 70% less likely to see a drop in productivity.

Bump up employee training and development

It might seem counterintuitive to offer more training to remaining employees, but this could be just what they need to re-engage in their work. Offering workshops, courses, and mentorship programs serves as notice that you are still invested in employees as the beating heart of your company. You can continue to do so even without a large investment, and may even need to do so to upskill remaining employees into new responsibilities.

And employees notice. A survey of 2,000 professionals found that companies that offered ample professional development felt 15% more engaged. And businesses had a 34% higher retention rate.

Encourage collaboration

Collaboration in the workplace after layoffs is similar to friendship formed in battlefield trenches. In fact, happiness at work is more about co-workers than it is about supervisors — 23.3% more, to be exact.

Encouraging collaboration among employees can help create a supportive and positive workplace culture. This looks like:

• Encouraging authentic (not cheesy) team-building activities
• Promoting cross-functional collaboration and training
• Creating opportunities for employees to share their experiences and ideas (positive and negative)
• Designing training that is group-oriented

Happy employees lead to — you guessed it — more engagement. And engaged employees are 87% less likely to look for another job.

Provide employee recognition and rewards

When done in an authentic manner, employee recognition and rewards serve to not only boost employee morale after layoffs but to also incentivize performance.

It might be disingenuous to offer a monetary reward after layoffs, but there’s good news: even simply recognizing employees and their good work is enough to boost retention by 37%.

You’re not alone

Layoffs are a challenging and sensitive situation for any company. It is important to handle them with compassion and professionalism to minimize their negative effects on employees and to improve workplace culture after the layoffs.

Before the dust settles, you’ll need a plan. EdgePoint Learning can help your business recover from layoffs with messaging strategies for improving workplace culture and re-engaging employees after a layoff. Knowing how to handle layoffs is the first part — we can help you move forward with rebuilding. Get in touch today.