The workforce is the backbone of any known business, and much of the revenue that the business attains will usually be from the production put out. A business organization’s main strength is how it will retain its employees while keeping them satisfied in the workplace. Of course, employees and workers don’t work for free, and they are paid a wage tied by a contract and the labor laws associated with the contract.
However, the COVID-19 pandemic has caused a major economic recession that has affected even multi-billion dollar industries worldwide. While there are still industries that aren’t hit hard by the pandemic, a plummet in foot traffic and demand have ultimately lead to companies forcefully laying off employees and much of their workforce.
Employers are often stuck in a rock in a hard place when laying off employees, especially when they want to maximize profits while retaining much of the workforce. But the economic crisis that the pandemic has caused major caught in the budget for corporations and companies. Thus, human resource personnel and much of the management is forced to lay off workers or sell assets.
So how do you gracefully lay off employees? Do you really need to lay off workers? We’ll be weighing-in on factors while answering some questions to ensure that everything is in order.
Alternatives To Laying Off Staff
First and foremost, it’s important to keep in mind that laying off employees shouldn’t be your first and only option. You will need to think things through a methodical manner before you deem an employee a liability rather than an asset. Although you’re trying to save funds and monthly expenditure by cutting down on manpower costs, firing high-skilled essential workers can inadvertently do more harm than good. That said, you will need to filter out essential employees from the non-essential ones and ask yourself, “Will daily operations be affected if this person isn’t here anymore?”
One great way of retaining some essential personnel is by giving some of the benefits of staying in business, despite the uncertainty and economic crisis that the pandemic has caused.
You will need to sit your employees down and have a frank discussion with them about why there will be some drastic changes in the company. While you might have to cut down on monetary incentives to some of these employees, they can still avail of loans and other incentives in the company. One of the popular types of loans they can utilize is the FHA loan, which is explicitly designed for low-to-moderate-income earners. They won’t have to worry about paying such a loan since it has a lower down payment than usual and will also have a lower credit threshold than your usual loans.
But other than retaining employees, how does a business gracefully lay off a worker without them becoming disgruntled on what’s happening? Here’s what you’ll need to know.
If you are now planning on cutting down on your staff, you will need to ensure that all details are in place and there’s a comprehensive plan that you can effectively communicate with your human resource team. The last thing that you want when you’re getting your point through is panic within your ranks.
Some questions you should ask yourself are:
- Is it a temporary lay off or a permanent one?
- Who will you lay off?
- How will you notify your workforce?
- Will you be able to support workers that are laid off?
- How will this affect your business in the near future?
Being Honest with Them
Lastly, you want to be as honest with them as possible regarding the situation. Most people are already cognizant of what’s happening around them during the pandemic, and there are bound to be economic repercussions. You’ll have to let them know that the company can’t afford to spend more than what they have to because of the pandemic.
There are different ways of laying off an employee while managing the budget cuts that your business will have throughout much of the pandemic. Sometimes, you can lay them off if you have sufficient evidence that they are more of a liability than an asset. Other ties, you can be straightforward with them that the company won’t have the financial means of supporting enough employees. Either way, transparency is key in ensuring that employees are “okay” with the layoff.