22.02.2023 Human Resources HR & Management Leadership Trends

The Empathetic Leader’s Guide to Layoffs

Use these eight actions to make the best of a tough situation.

Regardless of which side of the table you sit on, no one likes layoffs. Yet even in the U.S., where unemployment is at a 53-year low, 66,000 workers in the tech sector have lost their jobs to date in 2023. You can’t make this a good situation, but you can be intentional about conducting layoffs in an empathetic manner that does the least harm possible to affected employees, those who are spared and the business. Here’s how.

No. 1: Confirm layoffs are the right choice

Downsizing can have long-term impacts to productivity and talent, so before you go in this direction, consider whether these seven alternatives are worth exploring:

  1. Hiring freezes
  2. Mandatory furloughs
  3. Voluntary leaves of absence or reductions in working hours
  4. Organizationwide pay cuts
  5. Executive compensation reductions
  6. Benefits cuts
  7. Staff or job sharing

No 2: Do it in one fell swoop

In the event you proceed with layoffs, know that rightsizing a company is tricky. Cut too many people and the business won’t function effectively; cut too few people and you haven’t solved the problem at hand.While many CEOs, who are eager to preserve stability and retain trusted team members, have the laudable instinct to underestimate reductions, downturns are often more severe and long-lasting than they project. Kaustav Dey, Senior Director Analyst within the Gartner for General Managers team, suggests being a little pessimistic here to avoid a second round of layoffs, which sends the message that management misjudged the situation and makes future layoffs seem more likely, thus decreasing employee morale and retention.

No. 3: Prepare managers to deliver the news

Although HR is often present for layoffs, managers are almost always closer and more in tune with affected employees. Given the emotional aspect of the relationship between managers and their direct reports, it’s especially important to prepare individual managers for the three critical stages of the separation conversation: Preconversation, the conversation itself and postconversation.Provide managers with information on how the layoff decision was made, what support (severance, COBRA, career coaching, etc.) the organization will provide, a script to follow and guidance on how to handle common employee reactions.

No. 4: Be mindful of the effects on DEI

We are seeing recent tech layoffs impact headcount within HR, where a large portion of DEI programs and dedicated resources live. And, unlike business-as-usual talent processes, layoff decisions are often made without rigor around or consideration of potential biases and impacts on DEI outcomes. “With highly publicized layoffs underway, it will undoubtedly create uncertainty for key initiatives intended to attract and hire diverse talent segments,” says Chandra Robinson, Director Analyst within the Gartner HR practice.Use this as an opportunity to shift from collective to consequential accountability — that is to say, instill personal ownership and hold leaders accountable for DEI outcomes. Gartner research shows that the organizations that make this change will save up to 13 years in reaching gender parity and up to six years in reaching racial parity on their leadership bench.

No. 5: Be as transparent as possible

“Exhibiting authentic leadership throughout the layoff process is critical to building trust and eventually driving success,” says Dey.This requires open, honest and empathetic communication. Take responsibility where it is your place to do so, and commit to meticulously executing plans, schedules and timelines. Undoubtedly, your team feels vulnerable. Considering this, every communication and action is vital to making the situation less painful.

No. 6: Make communication a two-way street

“Providing employees with a real-time sense of what is happening in their organization and proactively addressing issues (internal or external) will not only allow you to move the narrative on your terms, but will also help build trust within your workforce,” says Patryck Allen, Senior Director, Advisory, at Gartner.And remember, you can only anticipate and mitigate employee concerns when you actively listen to their feedback.

No. 7: Designate a special total rewards team

Our research shows that when employees don’t trust their employers, they are less likely to believe they are paid fairly. Given that layoffs also affect employee trust, this is the moment to put in place a dedicated team within the total rewards function that is focused on these issues. In partnership with internal comms, they can educate employees about how pay is determined, equip managers to make equitable pay decisions and develop a pay equity team.A 2022 Gartner survey showed that when organizations educate employees about how pay is determined, employee trust increases by 10% and pay equity perceptions increase by 11%.

No. 8: Pay attention to your remaining employees

Reductions in workforce also deeply affect those who are not laid off. The majority of remaining employees respond in at least one of three ways: Fear about their job stability, feelings of burnout, or a sense of detachment from their work and the organization at large. This is yet another area where giving visibility into the decision-making process is valuable — it ranks second only to open dialogue in maintaining trust during times of change.Other actions to take include:

  • Creating space for employees to express their anxieties.
  • Regularly updating teams on evolving departmental priorities.
  • Reminding employees how their work impacts the broader business.
  • Rewarding strong performance.
  • Identifying opportunities to build skills and networks within the organization.
Source: Gartner

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