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Planning a Layoff? Keep Your Company Culture in Mind

Planning a Layoff? Keep Your Company Culture in Mind

November 17, 2016
Submitted By Emily Elder

No business wants to let employees go, but when you conduct a workforce reduction, remaining employees should never be an afterthought. In fact, top company values - which drive all your important business decisions - should play a guiding role.

I’ve advised our customers on strategic approaches to employee outplacement, and have seen numerous organizations align their company culture with workforce reduction processes, while others fall short. When companies get it right, they create a positive experience for everyone involved.

How you transition employees out of your company will greatly impact the vibe across your workplace, therefore your company culture should set the tone for when you let employees go. Start with these five steps:

  1. Focus on your company culture. Forbes reported on a recent study by Duke’s Fuqua School of Business survey of CEOs and CFOs. Turns out, only “15% said their firm’s corporate culture was where it needed to be.” The authors of the study acknowledged that culture is very difficult to measure and align with the other functions of your business. Yet difficult does not mean impossible, so start with values that are most important to your company. This could be transparency, teamwork, customers, results focus, or some combination of top priorities.
  2. Come up with a plan. It’s next to impossible to have a positive reduction in force (RIF) experience without proper planning. Determine the stakeholders, training and services you need ahead of a RIF, and spend time and resources making it a smooth event for all employees, whether they must deliver or receive the news. Create a plan for making your company culture a part of manager preparation and the message they deliver to impacted employees. If your culture revolves around open communication from management, it would make the most sense for the manager to present the news directly to the employee. Our Guide to Planning and Conduction an Organizational Workforce Reduction is a great place to start.
  3. Cross-reference your company values with your plan. Take time to examine each stage of your plan, from who will break the news to impacted employees and what message you’ll tell. Each step should support company culture. If you identified transparency as a top value, evaluate whether or not each stage of your plan is conveyed openly and honestly to employees.
  4. Don’t forget about severance pay. How you handle employee benefits and severance pay can make or break the perception of a reduction in workforce. Hit the right balance and your former employees might be disappointed, but understanding; on the other hand, if you miss the mark, you’ll have negative Glassdoor reviews and discontented alumni. Consider how long severance pay and benefits will last and be sure it’s well aligned with how you typically care for your employees. For example, if you’ve provided a generous paid parental leave policy, or offer unlimited vacation, it would be inconsistent to let employees go with no financial support. You can download our Guide to Severance and Workforce Transition for tips and benchmarking.
  5. Choose an outplacement company well-aligned with your values. If you’d list employee empowerment, accountability, respect, honesty, or community as top company values, you’ll want to choose an outplacement company that shares those same values. A cultural alignment between firms will make the transition as smooth as possible.

While human resources, legal and senior management might drive a reduction in workforce, it truly takes an all-hands-on-deck approach to align company values throughout the process. Although layoffs are rarely ideal, when handled appropriately, employees are more likely to move forward with acceptance and positive attitudes.

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