Everyone has their layoff horror stories. About the company that videotaped the news and mailed a copy of the tape to every laid-off worker's home. Or the company that announced people's names over the loudspeaker as they were called in one by one to be laid off.
There was the company that sent an e-mail around laying people off, and then compounded the problem by telling the employees that they were to blame for the problems that led to the layoff. “The message these poor people got was, ‘You not only are out of a job — but it's all your fault!’” says Peter Giuliano, founder and chairman of Executive Communications Group, an international consulting and training firm based in Englewood, N.J., who has worked with dozens of companies in the middle of layoffs.
“When executives handle a downsizing this way, they miss an opportunity to enhance their image as solid, effective, caring managers,” he adds. “They shortchange themselves.”
What Should Happen — But Often Doesn't
Why is it that so many managers don't take the time to consider the best way to communicate layoffs? Some are in a state of denial or simply are avoiding a difficult situation, says Giuliano, while others prefer, as he puts it, “to rah-rah the bad news.
“A lot of companies have allowed themselves to be the victims, rather than the masters, of the layoff process,” he says. “It's an ostrich-like reaction. ‘If I just hide my head in the sand, I won't notice the problems.’”
The effect of such insensitivity is that everyone — not just the affected workers, but also the survivors and the general public — gets the message that the company never cared about its people and likely never will. That's a major black mark on a company's public image.
“Layoffs are not one-dimensional business decisions, but complex changes that affect people's lives. So how a company communicates a layoff and treats its people will be remembered for a long time,” says Katherine Woodall, principal of Towers Perrin, a Stamford, Conn. — based management consulting firm. “Unlike decisions about equipment and inventory, which affect your balance sheet, people have memories. The worst thing that a company can do is to underestimate the impact of a layoff, especially the emotional toll that it takes on its people.”
Experts such as Woodall and Guiliano say the most sensitive approach to communicating the news is a face-to-face, one-on-one meeting with each person being laid off. Immediately after these, companies should hold group meetings so that the entire workforce can be told the news.
But that's rarely what companies do. “If I could paint a picture of the ideal world, everyone being laid off in any size company would be treated with care, dignity, and respect — and one-on-one is the best way to tell someone they're losing their job,” Giuliano says. “But one-on-one [meetings] just aren't possible in huge corporations. So you have to do everything you can to make it as personal as you can.”
Guiliano suggests companywide, town hall — type meetings with the entire workforce. After these meetings, attendees should be broken into smaller groups, moderated by department or division leaders or immediate supervisors, for further discussion. Other communication methods — the company intranet, newsletters, e-mail, and so forth — can be used to follow up on details.
Guiliano also is a strong advocate of making time in these group meetings for a question-and-answer period after the layoff announcement. There are, however, caveats to the process.
“Don't throw the floor open to questions before you've made your case as to why the layoffs are occurring,” he says. “You want to get the full content of your message out before you make the meeting interactive. Once you start taking questions, be factual, be concise, reinforce your story whenever possible, and be credible. You shouldn't try to control the questions too much, because then you risk coming off as negative. In the final analysis, the secret is that you have to be monstrously prepared to answer any and all questions, whether business-oriented or not.”
He adds that as soon as possible afterward, supervisors should have one-on-one meetings with the employees being laid off so that they can further address their concerns and answer remaining questions.
What Should Be Said — But Often Isn't
Just as important as how you go about breaking the news is how it's said, and to whom. An honest, open approach to all the constituents, as soon as possible, works best.
“You need to address those immediately affected — that is, those who are losing their jobs — as well as the survivors, who you need to retain and keep motivated,” says Ken Kniesel, senior vice president of U.S. operations for Drake Beam Morin, a Boston-based management consulting company.
“You also have to make the case for what's going on around you in the marketplace and why it's impacting the company's business to the degree that it [a downsizing] will occur,” adds Guiliano. “Just as nature abhors a vacuum, the market abhors silence.
“At the same time,” he adds, “it's crucial to remember that the people who are being laid off are the most important consideration. While you have to make the business case and the market case, you must remember you're dealing with human beings — and they want to know what's going to happen to them, not what's happening to your bottom line.”
It's important to get the news out before the rumor mill starts spinning. Guiliano suggests three to four weeks before the layoffs occur. However, Kneisel cautions: “You don't want to get out there with the news too early, because then you risk losing people who'll decide to leave on their own.”
When It Works, It Works
Joe Birriel, senior vice president of human resources and organizational development for The Martin Agency, a Richmond, Va., advertising firm, offers proof that well-planned communications and substantial follow-up efforts can soften the blow of a downsizing. When his company decided to lay off 45 of its 400 employees this past February, they hired DBM to help communicate the news and smooth the transition.
“We're a family-oriented organization, so it was hard,” Birriel says. “We had discussions with DBM before we made the decision, then brought them in to help us prepare. They convinced us that you have to communicate to the nth degree. You need communication efforts leading up to the [layoff] announcement, on the day of the announcement, and, most important, follow-up communication with the people who remain to carry on for their friends.”
On February 1 — just two weeks after the decision was made to downsize — The Martin Agency announced the layoffs, both publicly and to its employees.
“We were committed to having our people hear it first from us, not from the media or the rumor mill,” Birriel says. “We kept the lid on it well — not because we wanted to keep it secret, but to make sure our people heard it from us.”
The company followed DBM's plan of holding several group informational meetings, as well as one-on-one meetings between supervisors and laid-off workers.
DBM consultants stepped in to help the former Martin Agency employees find new jobs, and results of these efforts continue to be communicated to the remaining employees in regularly held group meetings. According to Martin Senior Account Executive Lisa Just, the majority of the laid-off employees have landed new positions.
“One-on-one [meetings] just aren't possible in huge corporations. So you have to try to make it as personal as you can.”
— Peter Giuliano, chairman, Executive Communications Group
“The feedback we got — even from many of the people we let go — was overwhelmingly in favor of the way we handled it,” says Birriel. “We were worried not only about them, but about the folks who remained.
“It [the layoff] could have paralyzed us — but that didn't happen. The process DBM helped us implement made for a quick recovery.”
Bill Gillette is a Cleveland-based freelance writer and a frequent contributor to CMI.
Downsizing Do's And Don'ts
Communicate directly, openly and honestly with the employees who are most affected by the change.
Take the time to prepare a detailed communication strategy and action plan, which includes outlining the roles of leadership during the announcement, consideration of all major constituencies, the timing, and key messages.
Be sensitive to the emotions of the staff affected as well as to the emotions of the survivors.
Speculate if you do not have an answer. Tell the person who is asking that you will get back to him or her with more specific information if necessary, and then follow through on that commitment.
Overlook employees who may be on leave or out of their offices when an announcement is made. Ensure that all employees receive communication in a timely fashion. If your organization is global, you need to consider the release of information in different time zones and take into account local laws and cultures.
Assume that managers and supervisors will know what to say and how to handle sensitive conversations. Provide tools and training, if necessary, to help them do a good job responding to employees' questions and needs.
Source: Towers Perrin
The Hard Numbers
30 percent of companies experience increases in costs after a layoff.
22 percent of companies say they made poor choices as to who they laid off and who they retained.
80 percent of companies reported a collapse in employee morale after a layoff.
66 percent of companies showed no immediate increase in productivity after a layoff.
50 percent of companies saw no short-term improvement in profits after a layoff.
Source: Drake Beam Morin
Five Golden Rules
Behave the way you expect your managers and employees to behave during a layoff. How you communicate is as important as what you communicate.
Make sure that your words match your deeds. If you promise certain benefits and support for displaced employees, then deliver on those promises.
Designate a spokesperson to communicate with outside audiences, including analysts, stockholders, and the media.
Ensure that your managers have the training and tools that they need to prepare them for the layoff announcement and the changes that will ensue.
Be direct, open, and honest with employees throughout this difficult process.
Source: Towers Perrin