If you had your way, you’d only ever hire employees—and from time to time, get rid of the few bad apples who give you no choice.
But as every small-business owner knows, there are innumerable variables that can’t be controlled and that make running a company incredibly difficult. The economy could collapse, leaving customers with considerably less money to spend. A competitor could unexpectedly bring a better product to market way ahead of schedule while your latest offering is delayed by several months. A lawsuit can suck up an incredible amount of the company purse even if you’re completely in the right.
When money’s tight, for whatever reason, business owners are forced to act. While they might not want to have to lay off any workers ever, many companies are forced to downsize if they wish to keep their doors open. In fact, even the most well-known companies in the world are forced to lay off workers from time to time. Just recently, companies like Pandora, Lowe’s, Yik Yak, and Hershey announced they had to let people go.
While you may not be able to prevent having to reduce headcount for monetary reasons, you can put yourself in a position to handle layoffs in a way that’s fair to everyone. Use this five-point checklist to increase the chances that everyone involved in the process—employees being laid off, employees sticking around, and you too—ends up in a good place on the other side.
Spend an appropriate amount of time on messaging
Letting people go isn’t easy. But sometimes it’s necessary.
Never forget that when you have to eliminate jobs, you’re hurting people’s livelihoods. It’s tough, but it’s business. Before you tell anyone that his or her position is being cut, spend enough time making sure you have your message down pat.
Keep in mind you also need to figure out what to say to your employees who are keeping their jobs.
Don’t hide the bad news
While you don’t want to announce downsizing well in advance—productivity could grind to a halt until the affected are notified—once you decide which positions are being eliminated, don’t hesitate to act.
To succeed in today’s fast-paced business world, organizations need to be agile. While it’s never easy to be the bearer of bad news, it’s part of any small-business owner’s job description. Tell your employees who are losing their jobs what’s happening as soon as it makes sense to do so.
Remember, of course, to have these talks in a private location.
Empathize with those who don’t make the cut
Put yourself in your employees’ shoes. Imagine being told you’re losing your job. It’s tough—and even more so when you have a family to support.
Tap into your emotional intelligence and be as empathetic as you can possibly be. Maintain your composure and make sure the tone of your voice matches the gravity of the situation.
Support outgoing employees as much as you reasonably can
It’s a tough job market out there—even for highly skilled employees. This is particularly true of Millennials; 51 percent of the workers in this younger generation are underemployed.
That being the case, offer your support to the employees you’re forced to lay off. Write them letters of recommendation. If any of your friends have openings at their companies, see if the positions make sense for any of the folks you had to let go. Volunteer to be a reference.
Listen to your remaining employees
Whenever you’re forced to let people go, it’s only natural for the members of your team who still have jobs to be dejected. Their friends aren’t allowed to be in the office next to them anymore. Don’t treat them poorly if they are unhappy in the immediate aftermath of a downsizing.
At the same time, you need to let the remaining employees of your team know there’s a reason why you kept them on board: They’re immensely talented and, despite your company’s current financial position, you are depending on them to help you climb out of the hole.
To this end, make it a habit to ask the folks who made the cut what they think about future initiatives. Involve them in your company’s decision-making process. Find out what they would do to make your business better.
Make their best ideas company policy and it’ll be time to hire more workers soon enough.