Layoffs in America are on the rise. Forbes reports that 51% of corporate executives have implemented or plan to implement layoffs in 2022. This report also stated that 52% of the executives surveyed have made or plan to make hiring freezes.
Unfortunately, the current economy is leaving no other option for businesses. Most business owners are struggling with inflation and a looming recession, so they see job cuts as one of the only ways for their businesses to survive.
It’s important to consider all of your options before you decide to let some of your people go, but if you do have to lay off employees, there are a few things to keep in mind.
Be Certain Layoffs are Necessary
If you are concerned about the financial status of your business, the first thing that you should do is talk with a trusted financial partner. Meet with an expert, review your previous financial plans, and crunch the numbers before you make any decisions.
After you thoroughly review your finances, ask your financial partner if there are any other solutions to your problems, specifically ones that do not involve layoffs. For example, you could offer your employees options like:
- Furlough
- Exit incentives
- Voluntary sabbaticals
These are temporary fixes, but may buy you extra time. Hopefully, your financial partner will have other suggestions on how you can save money and also save your employees’ positions. Be sure to consult with this individual before you do anything else.
Plan Ahead
If your financial partner believes that layoffs are the only option for your business, you will need to create a solid plan before you take action.
For example, you will need to figure out:
- Who you are letting go and why?
- Will this affect just one department, or will the layoffs be company-wide?
- What employees will be needed for the transition period?
There will be lots of questions for you to consider, so make sure you have all of your work covered before you move forward.
In a sensitive situation like this, timing is key. Be sure to give yourself and your employees the right amount of time needed to navigate this process.
You will need time to develop your plan for the transition. The employees that you layoff will need time to figure out what their next moves will be. The employees that remain at your company will need time to determine how these changes will affect their current duties. Although you may not be able to please everyone, try to give people, including yourself, ample time to prepare for the upcoming changes.
Be Respectful
There is no doubt that this will be a tough time for your employees. When you break the news to them, be as respectful as possible.
First of all, you should schedule one on one meetings with every employee who will be affected by the job cuts. Even if you are laying off multiple people, you should meet with each one individually. Your employees deserve a chance to cope with this news privately, not in front of several of their peers.
When you do meet with these people, be candid and honest. They will want to know the truth about why this is happening, why they were selected, etc., so be willing to share as much information with them as you can.
Lastly, approach each conversation with kindness and compassion. Remember, this is changing their lives and possibly their families’ lives, so you will want to be sensitive to each individual’s situation.
Offer Support
This is a difficult time for your employees, so do what you can to support them through it.
A few ways that you can provide support may include:
- Offering severance pay if possible
- Contacting other employers to see if they have any open positions
- Working with a talent agency to help with job searching
- Offering to be a reference or provide letters of recommendation
Even if it takes a little extra effort on your behalf, show your people that you still care about them. These small acts of kindness will go a long way in mending your relationship with your employees.
Rework Your Business Plans, so Layoffs Won’t Be Necessary Again
Layoffs should serve as a “last resort” for your company, and working with a trusted financial partner is a great way to try to avoid layoffs. These skilled individuals will help you build a solid financial foundation for your business, so hopefully, you won’t ever find yourself in the position where you would need to consider layoffs.
If layoffs are necessary though, financial partners will help you navigate this process and restructure your business plan. Pasquesi Partners can guide you through these difficult changes and help set you up for success in the future.
Contact Pasquesi Partners today.