Layoffs are Looming
Layoffs have become increasingly prevalent as companies adapt to economic changes, technology advancements, and shifting consumer behavior. While reductions in force (RIFs) are sometimes necessary for survival or realignment, poorly managed separations carry significant legal, financial, and reputational risks.
To navigate this process effectively, companies must understand the associated risks and adopt a comprehensive approach to layoffs. Rather than avoiding the issue or willing it to disappear, it’s time companies prioritize offboarding with the same forethought they give to onboarding.
Risks Associated with Layoffs
What are the risks of being reactive vs. proactive?
Violations related to the Equal Employment Opportunity Commission (EEOC) - Companies must check to ensure layoffs aren’t discriminatory, which isn't easy without the right analytics. Even if a protected population is inadvertently affected, companies can face costly penalties and lawsuits.
Lawsuits pertaining to the WARN Act (or mini WARNs) - Layoffs that meet certain size thresholds trigger the federal WARN Act, which requires a 60-day notice (or the equivalent in back pay and benefits). If your state has a mini WARN Act, you must comply with that as well. Violations may result in individual or class-action lawsuits.
Negative press - No company wants to be in the news for layoffs. But you’ve probably noticed that some layoffs are matter-of-fact while others are characterized as having been botched. Negative publicity, including viral social media posts, can increase the financial woes of an already faltering company.
Security concerns - During layoffs, the use of spreadsheets and email to manage sensitive employee data poses serious cybersecurity risks. A single misdirected or unsecured email can expose confidential employee information, leading to regulatory penalties, legal consequences, and damage to employee trust.
Although those risks may seem harrowing, thoughtful preparations and the right technology can lessen the impact.
Benefits of Standardized Separations
With a standardized separations process, you can make the most of a difficult situation. Here are some ways process enhancements may benefit your organization:
Maintain Morale - If you’ve developed a respectful communication plan and built a robust severance package, affected employees will have a more positive experience and be less likely to retaliate. Plus, surviving employees will take note of this careful consideration, helping maintain company morale.
Retain Top Talent - Advance notification to employees provides Talent Acquisition teams with time to fill open positions, keeping top talent within the organization when possible. For those who don't find another position internally, advance notification gives them time to search for another job. If your layoff process is reactive, you risk losing top talent for good.
Mitigate Risk - Layoffs will always be difficult, but noncompliance makes them much harder. The right technology can ease this burden by automating compliance and improving consistency. Don’t end up on the wrong side of a lawsuit simply because you didn’t take the time to develop airtight processes.
Yes, layoffs are coming. Compassion and preparation will be critical to recovery.
