Historically, January has been the cruelest month in terms of employment. Business leaders and their staff returned this week back to the post-holiday grind. Those same leaders are spending this week and the next several quietly evaluating and discussing this year’s budgets, head counts and expenses making cuts and changes. But this year is different. There’s more’s uncertainty which is why businesses are playing it safe. A great deal of this playing it safe has to do with the inauguration of a new president which happens January 20th, 2017. Even without a new president, January is the month where employees are often informed their departments are being restructured, company lay offs happen or involuntary terminations due to performance. It just happens this way.
The surge in terminations ushers in difficult conversations and decisions involving employees. Regardless of your tenure with an organization or experience level, telling people they don’t have a job is hard and deciding where to make those same cuts is not an easy task. While I’m not here to tell you how to run your business, I am here to remind you of some considerations when it comes to terminations and layoffs that business leaders and managers need to understand, make plans for and contemplate.
Limit Your Legal Exposure After an Employee Termination and Layoff
Part of the role of an HR professional is to help evaluate anticipate risk when it comes to restructures, employee layoffs and terminations. If an unconscious pattern exists to a recent rash of terminations regardless if you meant to do it or not, it raises a red flag and is called unconscious bias. This unconscious bias is an area the courts system and the EEOC are evaluating more closely which is why it is important for employers to discuss the protected classes employees who are departing might fall under and where those liabilities might lie. While I’m not suggesting you make employment decisions based on these things, it is worth a conversation. For example, HP was slapped with a lawsuit by four former employees who were over 40. Their positions were eliminated due to company restructuring. General Mills is also facing a similar discrimination lawsuit filed by 30 former employees. Click here for resources on how to limit legal exposure.
Educate Yourself on the Unemployment Insurance and the Filing Process
One of the biggest myths that leaders tell themselves is that if they give their restructured employees enough notice, they company will not have to pay unemployment. This is absolutely not true. Yes, an increase in unemployment claims will result in an increase in your unemployment insurance rates. Unemployment benefits exist to help your former employees bridge the gap between jobs. Educate yourself on the process and your time commitment. This is critical especially if you are seeking to deny an employee’s unemployment benefit claim. Click here for unemployment benefit resources.
Severance Pay is a Common Practice for Exiting Employees
Sometimes employers choose to bridge the gap not just with unemployment benefits for their staff. They allow for severance pay which continues an employee’s salary after they exit your office. This type of compensation isn’t just for executives and restructured employees. Sometimes it’s worth compensating your employees to remove them from further negatively impact your workplace or if you would like to keep their negative gossip about your organization out of the public view and off of employee review sites like Indeed and GlassDoor. Click here for severance pay resources and information.
Don’t Forget About the WARN Act
The WARN Act is an employment law which requires employers to provide at least 60 days notice of layoffs and business location closures that impact more than 50 employees. Failing to comply with the WARN Act results in some pretty hefty fines for your business. Plus, it helps facilitate mass panic and hysteria at the offices that are not impacted by the closure. It’s important you follow the rules outlined in the WARN Act. Click here to learn more.
Prepare and Plan for Employee Conversations
Telling an employee they have been laid off has been one of the least enjoyable parts of working in HR. Just because conversations like these are unpleasant doesn’t mean they aren’t important. It’s critical that you talk to your impacted employees as soon as possible. You need to have your severance and/or termination documents handy including information regarding COBRA and benefits continuation and a firm timeline of when the organization needs to the documents signed by them. Business leaders should have a prepared script for these conversations, and I encourage they practice and even role play different scenarios as employees react to news like this differently. Don’t forget to prepare internal and external company communication and coordinate those communication efforts. A simple tweet, text or private message to co-workers, can travel around your workplace in a matter of seconds. Click here to access communication resources.
Protect Your Employees
We’ve all read stories or heard them on the news of an angry former employee who enters their old workplace with weapon in hand. Preparation in these uncomfortable situations or conversations is critical for not just the exiting employee but others in the workplace. Take the extra time to work through situations, scenarios and make sure that you, as a leader have done everything in your power to help make the transition as dignified and smooth as possible for the employee who is leaving. Take measures to step up security of your offices and protect your employees. Maybe that’s installing new lights in the parking lot, investing in career assistance for your exiting workers or by investing in making the offices a more secure facility.
My belief of dignity first is the reason included the quote above from Lauren Hillenbrand, “Without dignity, identity is erased.” This sums up how a leader should view and approach a difficult employee conversation whatever it may be. While we can’t know their personal and financial circumstances, we can know, understand and sympathize with them by taking the proper time and effort in preparation for those uncomfortable conversations. Your preparation sends a message to them of your concern and professionalism to help make their transition as pain and stress free as possible.