How to manage forced layoffs of good employees

By jamie | May 5, 2010 | BPM, Solutions

Traditionally, when an employee left a company, this departure was usually due to one of two reasons:  either the employee found another job elsewhere, or the company fired the employee due to poor job performance. But in our current economic climate, a new category of layoffs has emerged: forced layoffs of good employees, simply due to budgetary cuts or financial reasons.

In these tough economic times, when layoffs have skyrocketed, the employee off-boarding process has taken on much greater importance.  Many companies had not experienced significant layoffs until recently, and many good employees are finding themselves out of a job due to economic, rather than performance-based, reasons.  So when a company is forced to lay off good workers for financial reasons, the off-boarding process takes on a new significance, both for the employees and for the company itself.

To ensure that employees leave on the best possible terms, as well as manage stress and reduce risk, it is important for human resources management to establish a consistent and uniform off-boarding process to coordinate employees’ departure.  Companies are wise to distinguish between employees who have decided to leave the company on their own terms, those who have been terminated for poor performance, and those mentioned above who have been let go for economic reasons. Likewise, during the off-boarding process, different considerations and steps should be incorporated into the workflow design depending on the circumstances of the employee’s departure.

For example, even those workers terminated for performance-based reasons may be entitled to severance packages, or an extension of health care or other benefits even after their departure.  Likewise, certain employees may be eligible for early retirement benefits, or pension plans, depending on their longevity with the company. Employees who leave on their own volition may or may not be entitled to these same benefits.  A good off-boarding process ensures that the appropriate benefits are identified and the proper steps are taken to provide them.

Furthermore, when a layoff is economic rather than performance-based, many employers are choosing to add employees’ resumes to an internal “resume bank” in order that they be considered for job opportunities within the same company.  When employees are terminated due to budgetary reasons, companies may wish to maintain a database of those employees’ resumes in case new positions or opportunities become available in the future. Workflow software can support the creation and management of such a database to ensure that good employees stay with the organization.

Lastly, if an employee is being terminated principally for economic, rather than performance-based, reasons, an honest exit interview can provide a valuable opportunity to discuss those factors and hopefully leave the door open to the employee in the future. Or at the very least ensure that the employee leaves with a positive impression of the company.