How to lay off employees with grace

There is nothing easy about the process of laying off employees, and it can be emotionally draining for everyone involved. When faced with this situation, a company’s leadership must approach it with compassion, empathy, and grace.

The reason for the layoff must be communicated openly, clearly and honestly. Employees affected by the termination should be given severance packages and even offered job search assistance. It is also crucial to support the remaining employees who may be affected emotionally by the layoffs.

For older workers, companies may offer early retirement packages as a proactive measure to manage labour costs, but these programs should be designed in a way that is fair and equitable to all employees.

Laying off employees is a difficult decision for any company. Here are some ways to make the layoff process less painful and assist employees transition into their next career path.

Related: How to create a great employee experience – in the office or at home

5 factors to consider when laying off employees

1. Be honest about why you want to lay off employees

Tell the employee why they are being laid off, even if it is due to poor business performance, workforce reduction, a change in corporate direction or cost-cutting measures. You are not doing the employee or yourself any favours by concealing the reason.

During a retrenchment exercise, employers must be honest when informing employees why they were laid off. This helps build trust with employees and prevent misunderstandings or rumours from circulating.

Being truthful and transparent also shows respect for the affected employees and can help them better understand the situation and move forward with their career plans. Additionally, honesty can demonstrate the employer’s commitment to ethical behaviour and corporate responsibility, which can aid in preserving the company’s image in the long run.

2. Be compassionate when employees leave, even if they had a short time working for you

Compassion is an important value for companies to uphold, even when employees leave after a short tenure.

When employers show compassion to employees leaving, even those who have only been with the organisations for a short time, it demonstrates that the company values its employees and respects them as individuals. This needs to be handled with extra care if you are working in a virtual office and communicating with your employees remotely.

When companies handle employee departures with compassion, it can also help minimise negative emotions such as anger or resentment, which could damage the company’s reputation or even lead to legal issues.

3. Consider redeployment for impacted employees

To mitigate the impact of job loss, senior management teams should look for alternative placements within the company to deploy employees affected by the layoff. Employees can have the option of moving to another department or opting for voluntary retirement.

This shows that the company cares about its employees and is committed to finding a solution that benefits everyone. This approach can also help the company retain valuable employees and reduce the costs associated with finding and training new hires, and manage the morale of the current workforce.

On top of that, offering the option to move to another department or voluntary retirement gives the affected employees some control over their situation, which can help them feel more empowered during this challenging period.

It is important to acknowledge that employees who are redeployed to different roles may experience anxiety and uncertainty. As such, the company should prioritise clear communication and ensure that they understand the reasons for the redeployment and what the new role entails. Companies may also provide a retention bonus for those who choose to stay.

Companies can provide additional support to employees during this period, such as training and coaching, to help them adjust to the new position to demonstrate their commitment to treating employees fairly and with respect, which can help to maintain morale and productivity during a difficult transitional period.

Related: How to hire to improve gender diversity in the workplace

4. Provide support and care for termination processing

Allow your employees time to process the termination, collect their belongings, and say their goodbyes before departing your company. Employees should be informed of their permanent termination about a month before their last day.

Accept that they might need at least a day to come to grips with their termination and allow them to work remotely to let them grieve over their loss. A company owner may also consider reducing the work the terminated staff is to finish.

If laid-off employees are required to work for a few more days or weeks, companies can consider offering them remote work arrangements that would give them the personal space to grieve over the job loss.

There may be times when you may be unable to offer your staff the option of staying on for more than a day. When that happens, you need to think about how you can support laid-off personnel.

5. Offer financial and emotional support, and outplacement assistance

As part of the layoff announcement, employers could offer financial counselling in private rooms for retrenched employees, and arrange for a private space where they can speak with a counsellor or coach.

When a company offers outplacement services for retrenched employees, it means that they provide support to help those employees transition to new jobs or careers.

What are outplacement services?

Outplacement is an employer-sponsored benefit that is typically included as part of a severance package for employees who are laid off or terminated.

These services are designed to help workers improve their skills and become more marketable to potential employers. Services may include resume writing, cover letter writing, navigating job boards, networking, and negotiating job offers, which can be conducted by the human resources team.

By offering outplacement assistance, companies show their commitment to supporting their employees, and help to ensure a smoother transition for the impacted workers.

Communicating openly and honestly with terminated employees and the current staff is essential to avoid misunderstandings. Being transparent about the reasons for the layoffs, the process and timeline, and any support available can help minimise the impact on employees and maintain the company’s credibility.

Reducing guilt for remaining employees

While the focus is on the employee leaving, little attention is given to the employees who were “spared” termination. Company managers should talk to the whole workforce collectively about any retrenchment exercise, and not just to the affected staff.

These employees may feel relieved to have a job still but simultaneously guilt-ridden about the suffering of the former colleague who was let go, creating involuntary separations. Questions like “How am I going to face my friend who was let go while I am still employed?” may pop up in the person’s head.

This “survivor guilt” can affect the quality of work the remaining staff turns in, affecting the company’s operations. It may also affect the company’s public image.

Managers should also clearly explain to staff the other options considered before the decision was made to lay off the employee. The reason may be situational factors like economic downturns causing massive layoffs and various business reasons such as eliminating redundant positions due to new company direction.

Sharing details of how the affected employee is being supported to look for a new job by your company (such as providing outplacement services) can help ease the guilt of the current employees too.

Staff reductions can be challenging, so protect your employees’ well-being and avoid layoffs too soon after you have just laid off one group of employees.

Looking for a recruitment partner that understands your needs as you grow? Get in touch with us, and we can share more on the value Michael Page brings to your organisation.

Read more:
How HR needs to evolve to support the future of work
How to resolve workplace conflicts
How to be more confident at work according to Asia's female leaders