Mr. Jamie PaJoel is a venture capitalist and a Global Business Leader, an international keynote speaker and the CEO of Vantage Consulting.
He shares his thoughts on layoffs in the workplace and alternatives to layoffs.
The coronavirus has brought the longest economic expansion to a screeching halt, sent the stock market into a tailspin, and triggered staggering job losses around the world. Countless businesses have closed their doors, and those that haven’t are struggling to navigate a rewritten and rapidly changing economic landscape.
No one knows what’s next, but more layoffs seem inevitable. If your organization decides to lay off employees due to the economic effects of COVID-19, your human resources team can partner with leaders to help them make difficult decisions wisely. Equally important, HR can help each of your employees as they grapple with the effects those decisions will have on them.
Let me share my thoughts on how to best approach the difficult decision to lay off employees. Let me begins with an important suggestion about the big picture: “Be mindful of more than just the numbers side of things. Think about your employer brand and recognize that the way you implement these decisions will have a lasting impact on those who leave and those who stay.”
Before going ahead with layoffs, consider a fundamental question: Are Your Layoffs Necessary?
When sales and revenue suddenly fall off a cliff, leaders may feel an urgent need to cut overhead, and cutting labor costs is tempting because those costs are a substantial expense. But how should your firm do this? Layoffs aren’t the only way, and they are not always the best way. During COVID-19, HR can help decision-makers consider whether less dramatic measures might be more suitable for managing what is hopefully a short-term situation.
ALTERNATIVES TO LAYOFFS
Employees are often willing to cut their own pay in order to save jobs. To win employee support for pay reductions, make sure employees know that preventing layoffs is the goal, the reductions are expected to be temporary, and leaders are reducing their own salaries, too.
If your firm considers reducing pay by a certain percentage across the board, also consider whether lower-paid employees should have smaller percentage reductions, so they will still take home enough money to get by.
REDUCED WORK SCHEDULES
Having employees work fewer hours or days can keep pay rates intact while saving money and jobs. HR may be able to offer insights about which employees or teams could do this without compromising essential tasks and goals.
For some workers, a furlough of one or two months may be preferable to losing their position permanently. If employees are assured that their job will be waiting for them afterward, some may volunteer to be furloughed—especially if you promise that some benefits will continue uninterrupted.
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