It is likely that, in a company’s lifespan, the issue of layoffs will arise at some point in time. This is particularly true of project-based industries, like construction. Depending on the demand for work, the economy, and the continued advancement of technology, you may very likely find yourself in the position where a reduction in force could save valuable resources.
Unfortunately, this is way simpler than it sounds. Many companies do not give this process the care and foresight that it demands, and often experience negative consequences that end up costing the company more time and money than they were to save from the layoff itself.
Make sure that your staff reduction does not lead to lawsuits or other negative effects by keeping the following procedural recommendations in mind.
Conduct an Impact Analysis
Take a look at how the proposed layoff would affect your employees in terms of age, gender, and race. When you are just looking at the numbers you might forget about the demographics associated with these individuals. Before making any decisions, you should play out the scenario on paper and consider the impact ratios for different groups of people. Companies have been sued because they did not consider that nearly all of the individuals laid off were a certain race or gender. If you conduct your impact analysis and see that this could be the case – go back to the drawing board.
Listen to Data Over Managers
When you are coming up with a list of employees to put on the chopping block, you should be using concrete and objective metrics – not just because a supervisor “feels” a certain way. Data does not lie. By showing that a decision was made from a tangible set of criteria, you can demonstrate that the reason for termination was nondiscriminatory. Not to mention, you are likely to make better decisions about who to keep and who to let go. Just make sure that you carefully document the calculations and procedures.
Calculate the Long and Short-Term Effects
A large reduction in staff is not a decision that should ever be made lightly. It can be scary if you have had a bad year – or bad couple of years – and you may feel desperate to make a change. However, a layoff has far-reaching effects, and not just involving those who are losing their jobs. You need to make sure that the decisions involving the layoff are well communicated to all staff. Beyond that, you will need to make a concerted effort to keep company morale high after the fact. By doing so, you can minimize any internal damage that may come as a result.