This section is set up to provide a ready-made Brown Bag Session for you to use with employees and/or managers. Use as Brown is, or adapt this information for a general employee group. You Bagger may reproduce as many copies as needed. Best Practices for Handling Layoffs & Downsizings in the 21st Century
t’s no secret: The economy stinks, and an esti- than it would cost you. You can also ask for one mated 6.7% of the population is out of work. year of career coaching and the right to select the INo one enjoys looking for a job, even in the coaching service. People often underestimate how best of times. Certainly, downsized employees much time it will take them to find a new job, so feel the effects of a sluggish economy the most. they accept cash for the entire settlement. The But also affected are the leaders who must “do reality is the time in between jobs can be far less the dirty layoff deed” (few of whom relish firing worrisome when your health insurance is covered people in theatrical Donald Trump-style), the and you have career coaching to help you stay remaining employees, and the company as a positive and find a great new job. Cash may ease whole. Consequently, this article will present the pain in the short term, but these other benefits advice for the EA professional in working with will be crucial if you are looking for a job for a the employee — and the employer. long period of time.
Employee Recommendations 3 Don’t take it personally. Layoffs are Job hunting is a process fraught with stress, usually the result of budget cuts and lack of busi- rejection, and tedious legwork, according to ness — and not a direct result of poor perfor- Richard Bayer, chief operating officer of The mance. Regardless if you are the company’s most Five O’ Clock Club, a premier career coaching recent hire, or if your department is being cut out network. “But with a smart strategy for handling all together, your position can be in jeopardy your finances, managing your time, and executing regardless of how well you’ve done your job. your search, you can turn what could be a full-on You’re being laid off because your employer is disaster into merely a bump in the road.” The fol- having trouble in a tough economy — which lowing are Bayer’s tips to help survive (and even doesn’t mean that you can’t still be a valuable thrive) after a pink slip has been issued: employee to someone else. In fact, 78% of the unemployed people who belong to The Five O’ 3 Negotiate the best possible severance Clock Club get a job whose salary is equal to or package. (Hint: Don’t automatically go for the more than their previous pay. cash!) There are two keys to getting the best pos- sible severance package. First, whether it’s the 3 Make finding a new job your “job.” If cash settlement or career coaching benefits, nego- you are used to being in the office from 9 a.m. to tiate each item individually. This will give you 5 p.m. every day, it can be daunting to suddenly more leverage. Second, decide what you want out have all this unscheduled time on your hands. Job of a severance package, without regard for the hunters need to maintain structure and some sort company’s policy. Many employees simply don’t of day-to-day routine. A great way to do this is by know what they can ask for in their severance using your old work hours to focus on your job talks, so it pays to research this issue and give it search. Join trade organizations, schedule inter- some careful thought. views, and network as much as possible. An When you approach the severance issue, think unemployed person should spend at least 40 of what will benefit you in the long term. Health hours a week on his or her job search. insurance, for example, costs the company less
March 2009 EA Report Brown Bagger 1 Brown 3 Start your own business. Are you a prolific Bagger writer or a graphics guru? Use your business savvy to start freelancing while you’re searching 3 Manage your money responsibly. for a new job. It can provide a cushion of income Regardless of whether you receive severance pay, in between jobs and maybe even continue to sup- the way you manage your money immediately plement you once you’ve landed a new gig. Even after being laid off will determine your worry better, the business will keep your skills sharp level. If a cash settlement is part of your sever- and provide great references for your résumé. It ance package, you might be tempted to maintain will show a potential employer that you are moti- your current living status while you look for a vated and that your skills are desirable. new job. However, that money can disappear quickly — especially if you are left to pay for Employer Recommendations your own benefits. Most people are surprised While there is little “good news” to be found how long it can take to find a new job. Create a in a layoff, an employer can minimize the bad budget so that you can see how long you can live news. Handling terminations the right way will off of your severance pay. not only help separated employees make the best If you didn’t receive any severance money, of a bad situation, it will calm the nerves of co- you’ll still want to create a post-job budget as workers who didn’t get the ax — and salvage soon as possible. Examine how much money you public opinion of your organization. The follow- have, which bills are coming due, and what ing are some tips on how you can learn to termi- expenses you won’t be able to cut. Make sure you nate with dignity at your organization: can pay your critical bills — mortgage, car payment, etc. — and don’t spend money on any- 5 Put your policy in writing. An impulsive, thing extra. You may have to cancel an upcoming “letting the chips fall where they may” approach vacation or get rid of your cable TV, but you will has no place in a proper termination policy. be glad in six month’s time that you didn’t rack Termination procedures must be imbedded in a up credit card debt and that your savings is still written policy and, over time, instilled in the intact. organization’s culture.
3 Expand your job search. Just because you 5 Train managers in compassion. Great sen- worked for a large corporation in a large city sitivity is required when people are going through doesn’t mean that’s the only type of job you are a termination process. Organizations have long qualified to do. If you are searching only in Los trained managers to improve their hiring and Angeles, for example, think of looking outside interviewing skills. This enables them to be more the city or even in a different state. Or if you are astute in selecting candidates and more aware of looking only at large public corporations, con- legal pitfalls. The same degree of training should sider small or private companies. be given to managers for the hard task of letting Personal talents can lend themselves to a variety people go. of different job titles — you just have to be open to them. Looking for a job outside your comfort 5 Similarly, help people keep their dignity. zone can lead to unexpected opportunities. Employees who have been damaged by the termi- nation process may be ill-equipped to grapple 3 Don’t be afraid to be picky. When the bills with the emotional aftereffects that may come keep rolling in and paychecks have stopped, it next. Kindness can’t salvage the lost job, but it can be easy to panic and take the first job that’s may help the employee maintain the confidence offered. Hold your ground and don’t settle for a needed to find a new one. job that’ll leave you miserable over the long haul. Saying a nice word plays a critical role in However, if cash is needed now, be willing to helping people keep their dignity. Conversely, the accept a temporary position that’ll give you a lack of kind words eats at people and erodes steady paycheck to hold you over until a better morale. The guiding norm, at the very least, job comes along. should be “to do no harm.” In a downsizing or
2 EA Report Brown Bagger March 2009 Brown merger, it is easier to assure people that this is a Bagger no-fault situation. To keep it positive, you might say to an employee: “George, you’ve always treated as a threat. The trusted employee has sud- been a trooper; you helped us for 15 years, and denly become a danger. This creates humiliation I’m sorry that the organization has moved in a and resentment. There’s a better way: Present the different direction.” Or, “Mary, you have excel- option of a decompression period — a sort of lent people skills and have added a lot to the two-weeks notice issued by the employer in group.” which the discharged employee would have the opportunity to finish tasks, complete projects, 5 Be upfront about why this is happening. make arrangements for keeping in touch with co- A great deal of what happens next depends on workers, and perhaps most importantly, know he how people receive the news. Anyone will want has a definite paycheck coming in for the first to know: “Why is this happening to me?” Any two weeks of his/her job search. organization should be prepared to explain, at least generally, why it needs to cut staff, merge, 5 Assure employees that you’ll be a good or close. A good general rule is to be as open, reference for them. Since the primary rationale honest, and sensitive as possible. People are more for termination with dignity is to empower the likely to feel empowered if they understand what employee and enable him/her to move ahead with went wrong. his/her life, letting the individual know you’ll put in a good word for him/her when a future 5 Prepare a fair severance package, and be employer calls for a reference can play a crucial ready to explain it to employees. Most of the role. news we hear about severance packages concerns For years, organizations have believed that ref- an overpaid CEO getting a huge check on his erences can translate easily into lawsuits. way out while other employees receive little or Consequently, most employers do little more than nothing. In today’s business world where reputa- verify the dates of employment. The result, of tion is key, corporations need to make sure course, is that information is sought informally they’re allocating their severance pay fairly. It’s and travels by the grapevine — increasing the an important factor in terminating with dignity. chances of rumors damaging reputations and This presumes that the package will include sev- careers. It’s worth the effort to convey good news erance pay (when possible), ongoing career about former workers to prospective employers. coaching, and in-house counseling to help sepa- rated employees come to an understanding of Summary what combination of severance pay and support For the employer: If it appears you aren’t treat- services is appropriate. A full explanation of these ing laid off employees properly, consumers will benefits should be handed to the employee in think twice before buying from you again, and writing at the beginning of the meeting. the best talent will think twice before applying for a job with you later. You must terminate 5 Avoid “sudden death” discharges. While employees with dignity, or your actions will there may be no way to eliminate the element of come back to haunt you. surprise, there are ways to reduce shock and For the employee: Think of a layoff as an humiliation in the wake of a downsizing that has opportunity to improve yourself and to make a been a closely guarded secret. Except in the most fresh start. You can end up better off than you unusual of circumstances, there is little justifica- were before you got the ax. tion for “sudden death” discharges (i.e. abruptly telling an employee he is being let go and that he Dr. Richard Bayer is also the author of “The Good Person must immediately leave the premises). Guidebook: Transforming Your Personal Life,” $14.95, Five We’ve all heard the horror stories where fired O’ Clock Books, 2008, ISBN: 978-0-944054-16-1, available at www.amazon.com. employees are escorted from their desks to the door by security. In these cases, the person is
March 2009 EA Report Brown Bagger 3 Brown Bagger HANDOUT For Employees: More Secrets for Surviving Job Loss
1) Keep your spirits up. An alarming number of 3) Become a skilled job hunter. Good job hunters job hunters are becoming discouraged and drop- know what they want, what the market wants, and ping out of the job market. Remember that many how to present themselves. Having a well-written people are going through what you are. A great résumé and cover letter are key to being competi- way to get advice on how to handle being out of a tive. A poorly crafted résumé or cover letter can job is to join a job-hunting group to get support, prevent you from getting your foot in the door, ideas, and contacts. particularly in an economy that is flooded with people looking for work. If you don’t think that 2) Develop new skills. If you suspect your old your résumé and cover letter are up to par, find skills are out-of-date, take time to develop new someone to help you write them — and/or consult ones. If you’re being told you aren’t being hired a resource such as the Encyclopedia of Job- because you don’t have the right experience, get Winning Rèsumès, Third Edition, by Myra the experience. Depending on your area of exper- Fournier and Jeffrey Spin, $16.99 retail, Career tise, there are lots of great ways to hone and Press, www.careerpress.com. expand your skills. Take a class. Do volunteer work. The point is to do something. Source: Dr. Richard Bayer, COO of the Five O’Clock Club and author of “The Good Person Guidebook: Transforming Your Personal Life,” $14.95, Five O’ Clock Books, 2008, ISBN: 978-0- 944054-16-1, available at www.amazon.com. For Employers: Tips for Smart Cost Cutting
ometimes companies and other organiza- 4. Review staff salaries and benefits. Do this tions overlook the fact that layoffs aren’t the carefully, and make sure everyone is “sharing” the Sonly cost-cutting measure available to them. cost of health care. Before automatically letting people go, consider 5. Consolidate. Multiple offices, locations, etc., the following cost-saving tips: need to be reviewed for their contributions to profits. In many cases, terminating leases and 1. Cut management perks. Clearly, perks like closing of multiple locations stops the bleeding of these should be the first to go — including salary expenses. reduction and bonus cancellation. It sets the tone, 6. Don’t mess with morale. Never, under any cir- leads by example, and sends the message that cumstances, cancel an office party, rewards cere- “we’re all in this together.” mony, etc. Rewarding employees and lifting their 2. Cut expenses. Cut unnecessary travel expenses morale costs little. Gestures of thanks and appreci- whenever possible. Use phones, conference calls, ation keep employees loyal during trying times. and video conferencing as alternatives. 3. Seek solutions from staff. Ask people to come Source: Paul Facella, CEO of Inside Management up with their own cost-cutting ideas, and reward (www.insidemanagement.com), and author of “Everything I Know about Business I Learned at McDonald’s”, McGraw- them when they do. It is a very effective team- Hill, 2008. building process.
4 EA Report Brown Bagger March 2009