The market has shifted in the recent past, even after the Great Resignation that impacted employers in 2021. Corporate downsizing is happening across many industries, leaving company leaders wondering how to handle this process. We’ve compiled a guide to managing layoffs and corporate downsizing.
Strategize your hiring efforts
The first step in managing layoffs is trying to prevent them from happening at all, and this requires a careful strategy in your hiring plan. Try to hire as conservatively as possible, bringing on only the people you need to complete the necessary tasks. When your business expands quickly, you may end up bringing on new hires that have to be laid off in the future.
When creating new positions or filling existing positions, make sure there are guidelines in place for each role and its expectations. Implement performance tracking measures and assess them regularly. If someone leaves a position vacant, take time to assess whether it’s necessary to fill that role or reassign the tasks to others on the team.
Consider all the options
Before you start laying off employees, it’s important to consider all your options. For example, you might be able to furlough certain staff members, or provide them with a period of unpaid time off. Furloughing the entire workforce is a way to save money on a short-term basis. Another option is to offer exit incentives, like severance packages or other benefits in exchange for leaving voluntarily.
Avoid legal repercussions
Federal and state laws apply to corporate downsizing and layoffs, so it’s important to know how to take these steps legally. Speak with an experienced employment lawyer before issuing any notices of termination to employees.
Create a detailed communication plan
Informing employees of their professional future is vital in the process of corporate downsizing. Provide as much notice as possible to allow those impacted to evaluate their options and decide what’s best for their futures. Be transparent and upfront with all who will be affected by the downsizing.
Focus on the remaining workforce
Unless you’re laying off your entire workforce, you’ll have some employees remaining after the dust settles. Now is the time to focus on their needs to boost morale and provide support. You could consider hosting an all-staff meeting that overviews the new organization and how the necessary corporate downsizing was an integral part of future success.
It’s never easy to lay off a portion of your workforce, but it may be a necessary step for your business. By taking a careful and transparent approach, you can minimize the negative effects that come with taking such an action.
This post doesn’t constitute legal advice and is meant for educational purposes only. If you have questions for an HR expert, HR Help by PPI is the solution for you. You can get answers from professionals, as well as access a detailed database with helpful information about hiring, laying off, and other steps in the employee journey.