Conducting Compassionate Layoffs

The Conference Board anticipates that the US economy will experience a shallow, yet brief recession over the fourth quarter of 2022 and first quarter of 2023. Nonetheless, organizations should prepare for worst-case scenarios of a deeper and more protracted downturn, including freezing or reducing hiring, delaying raises and promotions, but also layoffs.

While there are innovative alternatives to layoffs, many companies in survival mode may feel compelled to make the tough call. To make reductions in force less painful and damaging in both the short and long term, The Conference Board suggests employers take the following seven actions to conduct layoffs more compassionately:

Leverage strategic workforce planning. Strategic workforce planning plays an important role in determining the criteria for layoffs and ensuring adequate talent remains to sustain day-to-day operations.
Communicate that all other cost-containment measures have been considered and that layoffs aren’t about personal performance. Both downsized victims and survivors will be much more accepting if they understand that their companies have exhausted other options before implementing layoffs.
Implement temporary furloughs with benefits. Those organizations in sectors with hard-to-fill positions may want to consider furloughs with benefits (temporary leaves with continued health care coverage) rather than permanent layoffs to prevent a slower recovery.
Provide training for HR and managers before conducting layoffs. Many executives and managers have never been trained on how to have difficult conversations, how to appropriately and compassionately conduct layoffs, or how to counsel remaining employees.
Demonstrate compassion to those who have been laid off. A personal touch from their manager and HR can help reduce the pain for employees who are laid off.
Provide financial, health care, and career assistance to those who have been laid off. Offer reasonably generous severance packages to all laid-off employees, even those who have recently joined the company, and provide information on unemployment benefits in your state.
Care for and engage remaining staff. Maintaining employee engagement is critical for long-term retention; accordingly, express empathy for the remaining employees and actively listen through pulse surveys and focus groups to help them overcome “survivor” guilt.

For more insights on how to deploy these strategies under adverse economic circumstances, see the following article written April 9, 2022, Human Capital Management during COVID-19: Conducting Compassionate Layoffs, containing tactics and examples that are still applicable today