Startup founders have a lot of things on their minds; however, HR is rarely one of them. As talent expert Tim Wenzel puts it, “HR is the kind of thing where most people think they know how to do it.”
Reinventing the Layoff Playbook
May 20, 2020
As we navigate these unprecedented times, many companies are facing potential layoffs–often for the first time in their companies’ histories and frequently for the first time in many managers’ careers. While layoffs should be a last resort, they can be inevitable in tumultuous times. Over the past couple months, more than 33 million people—that’s one in five American workers—have filed for unemployment, and nearly half of US companies surveyed indicated that impending layoffs were at least somewhat likely. Staff reductions are hard in any circumstance, but the combined realities of the staggering unknowns and human toll of the pandemic, the bleak job market and the complications associated with team members working from home are forcing businesses to re-evaluate long-held practices and invent a new playbook to navigate layoffs in the coronavirus era.
New best practice #1: Get up close and virtual
In the old (pre-pandemic) world, layoffs were typically announced broadly in all-team meetings, followed by in-person 1:1’s to discuss specific circumstances. This is no longer possible or even desirable given the prevalence of remote work. Some companies have executed high-profile misses by applying the old playbook to this new world, laying people off via impersonal Zoom sessions while leaving participant videos on, disabling participant chats, or creating mass confusion when people joined the call late. Legendary HR leader Steve Cadigan calls these “unforgivable moments,” which will long be remembered and defined for all involved.
The new best practice for the day-of layoff structure involves kicking off the process by notifying impacted individuals via virtual 1:1’s. Once the individual notifications are over, leaders can discuss what just happened and why with each team and the organization as a whole. Of course, this model may need tweaking depending on team sizes impacted. It would be tough to conduct 1000 1:1’s in one day. In those cases, 1:1’s may need to take place over a longer period of time, or the process may need to begin with small team notifications followed by 1:1’s.
New best practice #2: Equip managers for remote notifications
Managers who have never managed–or even experienced–downturns before are frequently the people delivering these tough messages. It takes time to prepare them for this task. They should not be finding out about layoffs the day before they occur! Managers must be taught to acknowledge and respond to employees’ emotions–crying, anger, fear–while delivering key messages quickly and humanely. Notification scripts should reflect how leaders would want this kind of news delivered to them. They should not simply follow basic employment lawyers’ scripts. While minimizing legal exposure is important, notifications must also be infused with kindness and humanity.
To prepare, managers can role play or conduct the meetings (or at least the first few of them) jointly with their own managers or other executives to support them. Managers should deliver the tough messages quickly while showing empathy and compassion and staying focused on the impacted employees (rather than their own feelings). Managers delivering layoff news should avoid scheduling meetings immediately afterward. Layoffs are emotionally draining. Managers should schedule time after notifications to collect their thoughts and recharge.
In the current environment, managers also need to remember that kids, spouses, and roommates may be in the room. Conversations should begin by explaining that challenging news is coming and giving employees an opportunity to go somewhere private.
New best practice #3: Construct severance package around what matters now
Severance packages should align with each company’s values. Leaders should be thoughtful about how to make the investment go far and ensure that people feel cared for. Packages should also reflect what matters most at this moment, particularly healthcare benefits continuation. HR leaders should think creatively and expansively about benefits that could be especially useful, such as pushing out stock option exercise dates, continuing to pay into retirement plans, or providing access to LinkedIn Premium accounts or free meals. Inviting employees to keep laptops or cell phones for an extended period of time is a low cost and thoughtful way to protect them from having to make expensive purchases during this time.
Businesses should go beyond core severance benefits to help impacted employees land on their feet. Executives can provide lists of relevant companies that are hiring or network on behalf of impacted employees. It’s so easy–and free–to share on LinkedIn and Facebook that great employees are available. It’s also thoughtful to help employees understand how to apply for unemployment benefits and point them in the direction of temporary agencies that can land them contract work. Finally, outplacement services provide personalized 1:1 support to impacted employees with professional branding (resumes and LinkedIn profiles), career advice (job search strategies, interview prep, offer negotiations), coding interview prep, and resources to refresh and uplevel skills.
New best practice #4: Inspire employees to want to stay after the crisis
This crisis will determine how leaders are judged and define each company’s employment brand for years to come. After the layoffs, leaders should share their go-forward vision to help employees focus on the future rather than the challenging present. Remaining employees will want to know what efforts were taken to reduce costs before moving to layoffs and will want to hear how the company is taking care of the people who left. Leaders should not make promises they can’t keep, such as claiming there will be no further layoffs given the countless unknowns, but they can show they care and explain what steps are being taken to protect and fight for the business–and them. It’s strongly recommended that leaders share in the pain by taking temporary reductions in pay and executing layoffs across all levels, not just the most junior. It’s also recommended to support local community relief efforts. It’s not only the right thing to do; it will also instill a sense of pride in the company. After layoffs, the most marketable employees often start to look elsewhere. To retain and keep valued employees engaged, invest in them with scalable remote leadership coaching or other skill development opportunities, and consider awarding additional stock options, grants, spot bonuses, or vacation time.
Moving forward, leverage this remote work period to deepen relationships with the team and connect with them on a more personal level. Begin meetings by asking how employees, their families, and their friends are doing. Take the opportunity to meet the kids or pets hanging out in the background or ask about hobbies that may be on display. Plan to vastly increase communications via team meetings, 1:1’s and emails by a factor of 2-4X, and transparently carve out time to listen to employee concerns, such as via recurring Zoom office hours.
This pandemic is a defining cultural moment. How leaders engage at this time will impact their success a year from now and dramatically influence employee motivation and engagement. As Franklin D. Roosevelt said, “A smooth sea never made a skilled sailor.” The seas ahead are rough, but by getting up close and virtual, equipping managers for remote notifications, constructing severance packages around what matters now and inspiring employees to want to stay after the crisis subsides, leaders can not only set their companies on a path to survive–but possibly even to thrive.
A version of this article was previously published in TLNT.
Slate Advisers is a scalable leadership and career transition coaching platform. Customers include thousands of managers and executives from high-growth startups, unicorns and Fortune 1000 companies.