Rightsizing with Empathy

Updated on November 19, 2020.

Making the decision to reduce employment expenses is one of the most challenging situations a leader like you can face. Although there are many options, such as reducing or eliminating retirement plan contributions, pay cuts and other operating expense cuts, staffing reductions may be necessary. In addition, there are important legal and compliance obligations to consider if you laying off previously furloughed employees.

Join our experts for an on-demand webinar on how you can rightsize your organization while keeping your company culture intact. Gain access here.

Rightsizing with empathy will help position your organization as strongly as possible during and after this crisis. Here are three steps you can take right now: 

Step 1: Carefully prepare communications 

Communication and transparency are key. Both impacted and surviving employees will be watching your words and actions, and this will leave a lasting impression on your employer brand. In addition to creating talking points, train your leaders on how to deliver the message to impacted individuals and their teams. Create and follow a communication timeline that ensures everyone hears the same message at the right time. Finally, provide separated employees with as many resources as possible, including outplacement and mental health services.

Worried you can’t afford these resources? There are many free ones available – and it will mean so much to your employees if you do the work to share them. Here are a few our team has put together: 

Step 2: Deliver the message 

Whether you need to deliver the message virtually or can meet in-person, a one-on-one meeting and good follow up is essential. Don’t assume the impacted employee will remember any of the details you share in the meeting. They will likely be overwhelmed by the emotion of learning they will no longer be employed, whether it is for a temporary period (furlough) or permanently (lay off).

Confirm their contact information and let them know when you’ll be calling to follow up on any questions. We suggest calling 24 hours later and at least one more time within the first week after separation. With furloughs, you will likely want to keep consistent communication to help ensure they will return to work when needed and feel connected to you as their employer. 

Wondering how to communicate with both those terminated and those who survive? Gain access to Rightsizing with Empathy and free toolkit here.

Step 3: Follow up with the survivors 

In addition to a followup plan for those impacted, it’s critical to have a solid plan to follow up with the survivors. Survivor guilt is a real state of mind, and employees can quickly sink into, “Why was my co-worker impacted and not me? What could I have done differently to prevent this outcome?”

It’s proven that more attrition will occur among those who remain. In fact, just a 1% workforce reduction can create an average 31% increase in voluntary turnover, according to a study by the University of Wisconsin-Madison. There is a direct link between reductions and how survivors think about their commitment to their employer. Do everything you can to prevent it. 

Engage survivors on a defined rhythm for 30-45 days. Clearly outline your objectives, audience, key points and communication channels. Start with key talent/individuals and then quickly work toward broader team communications.

This is a time to be transparent and courageous. Consistent messages from leaders are key but allow for honesty and candor. Finally, reinforce your gratitude and support for their new work environment and way of working. Don’t forget to provide mental health resources to the survivors in addition to your separated employees.

Converting furloughs to layoffs? Be aware of legal obligations

Did you furlough employees, and now you need to reduce them permanently them through a layoff? There are certain legal obligations you must comply with around the WARN Act and COBRA.

WARN Act

First, you must determine if the WARN Act applies  The employer coverage requirement generally applies to those with 100 or more full-time employees, with a triggering event such as a mass layoff as defined in the statute. You also may be subject to the WARN Act if you have a furlough lasting longer than 6 months. 

If the WARN Act applies, you are required to provide written notice at least 60 calendar days in advance of covered plant closings and mass layoffs. This allows the state to provide important resources to impacted employees to assist them with finding a new job. You can find more information from the Department of Labor. Also, be aware of any state specific WARN laws.

COBRA

Second, if continued health insurance coverage is ending for employees due to a layoff, you are required to provide COBRA notices to the impacted employees. During the pandemic, many employers have continued health insurance coverage for employees who have been furloughed, which does not result in a loss of coverage.

If you terminated health coverage for employees when the furlough began, which triggered COBRA at that time, additional action would not be necessary. 

In summary 

With careful planning and empathy, it is possible to stay legally compliant and preserve and even strengthen your employer brand and organization’s culture during the difficult situation of a staffing reduction.

Gain access to Rightsizing with Empathy, an hour-long on-demand webinar. You’ll get best practices, tools and processes to support you through this challenging situation and even walk away with a toolkit to help you confidently carry out the best strategy for your organization.

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