Best Practices for Laying Off Employees

In the wake of the COVID-19 pandemic, many businesses are finding it difficult to maintain their regular services. These uncertain times call for hard decisions, especially on the topic of employee termination. The job market is facing an onslaught of layoffs, mainly due to the population practicing social isolation. Some countries are enforcing lockdowns and quarantines, causing economic decline on a global scale.

The slowing of economic activity has an especially profound impact on the manufacturing and service sectors around the world. According to an estimate from the International Labour Organization, the Coronavirus pandemic could cost up to 24.7 million jobs globally. Canada, the United States, and other high-income countries are expected to experience a loss of up to 7.4 million jobs. Collectively, workers could lose between $860 billion to $3.4 trillion in labour due to unemployment. In fact, New York’s unemployment insurance site crashed as a result of numerous layoffs in the state. This period of businesses laying off workers, placing a hiring freeze, or even closing marks an unprecedented surge in unemployment rates around the world.

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Psychological Impacts of Being Laid Off

With an ongoing worldwide pandemic causing economic upheaval, it becomes more crucial than ever to consider mental well-being in the workplace—especially when it comes to laying off employees. The psychological impact of being laid off has effects comparable to experiencing profound loss.

Research has found that the loss of a job may cause people to go through the five stages of grief: denial, anger, bargaining, depression, and acceptance. At any point during these five stages, there is a potential for the former employees to feel resentment, become despondent, or even seek retribution.

Laid-off employees may experience anxiety, frustration, stress, embarrassment, or shame, which may cause feelings of depression, decreases in self-esteem levels, and a newfound distrust in others. In 2015, a study found that workers who had been laid off are 4.5% less likely than their peers to say they trusted others—this number rises to 7% if said workers place a higher value on their work or career.

The consequences of being laid off can be serious, especially if handled improperly. The employee may want revenge of some sort by tarnishing the company’s name, such as by posting bad reviews on Glassdoor or spreading rumours on social media.

In order to ensure this does not happen, it is crucial to foster good communication and increase transparency in the company. By exercising compassion, you can use a mindful approach when delivering bad news. Effective communication and transparency work together to ensure that employees are kept up-to-date and not in-the-dark. This becomes especially important during a period of job uncertainty.

For best practices in conducting layoffs, check out our five-step guided process below to ensure the best outcome. Remember that key principles such as compassion, communication, and transparency are crucial during each step of the layoff process.

Five Important Steps to Considering When Laying off Employees

  • Step 1: Have a Plan

Who will be involved in breaking the news? How will the layoff be conducted? What are some supports and resources that will be offered to the worker being laid off?

It is important to consult experts at this stage to better prepare for how the layoff will transpire. Talking with a lawyer who specializes in employment and labour laws could help prevent negative consequences in the aftermath of the layoff. Ensuring that the HR department or an HR representative is fully involved in the process can also mitigate some concerns.

At this point, you may want to prepare paperwork such as the employment termination letter, a final paycheck, a severance agreement, or a list of resources that employees who are laid off can consult for next steps.

However, before starting to break the bad news to employees, you might want to discuss the health of your business first. This is to increase transparency, so everyone in the workplace is aware of the current situation and can understand the circumstances behind any potential layoffs.

  • Step 2: Practice

Practicing how to lay off an employee can help prepare your approach to the situation. Proper training from HR professionals can be the difference between a poorly executed layoff—which may result in a ripple of negative consequences—or a well executed layoff that leaves the former employee confident in their next steps. The right training can ensure you have an effective script to follow, and give you tips on more subtle things to pay attention to, such as body language.

  • Step 3: Logistics

Now that you have a better idea of what the layoffs will look like, it’s time to plan out the logistics. This can be as simple as remembering to bring a box of tissues in the room where you will break the news.

It is best to pick a private, neutral meeting room, which can be less intimidating for workers than going to their boss’ office. Make sure to give the employee direct access to the door in case they wish to leave.

Try to choose a time of day that will be nondisruptive and mindful of the employee. Choosing a Friday would be ideal since it gives the employee the weekend to process and come up with some next steps.

When conducting layoffs of multiple employees, you might consider making a general announcement rather than bringing each person to a private room for a meeting. This allows employees who have been laid off feel less alone and unfolds a network of support and solidarity.
Now is also the time to review any documents needed for the employment termination. It is best to have these documents examined by a lawyer or HR professional.

  • Step 4: Delivering the News

When talking to your employee, remember to be honest and direct. Start off by saying that you have bad news instead of making small talk. During these discussions, things might get heated or emotional. You must remember not to engage in an emotional debate if it occurs—instead, ask to set up an appointment for a later time when emotions are not as high.

Another option is to offer a break from the heavy conversation, such as by offering a phone call to the employee in case they need to call someone for support. You can also let them have a moment to themselves to process things.

  • Step 5: Offer Resources

To soften the impact of a layoff, you can offer former employees resources to give them an idea of what to do next. Job search support services like resume writing, career coaching, and financial planning can go a long way in helping others get back on their feet. Retraining, education, and business grants can also help laid-off employees find success and confidence again.

Other things you can offer to ease the transition include a good reference and someone to talk to, such as an HR representative or a counsellor. By ensuring your former employees are given adequate support after breaking the news, you can minimize the harmful psychological consequences to getting laid off.

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Let Us Help

In addition to employee termination training, Imagine Better Solutions also helps with resume writing and job search training. As a company that strives to be a one-stop shop for ease-of-management, we have all of your HR needs covered.

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