Layoffs are complex and difficult decisions that companies sometimes face due to various factors such as economic downturns, organizational restructuring, or technological advancements. However, it is crucial for organizations to approach layoffs with fairness, empathy, and a clear sense of purpose.
Chester Canlas (Global Head of Talent Acquisition and Strategic HR Partner) shared a crucial point that we sometimes miss in our latest HR Roundtable.
“As organizations navigate the economic downturn, offering incentives and benefits can be a challenge at this time. As HR professionals, we have to be creative and play an important role in revamping our rewards & recognitions programs to further strengthen our culture of meritocracy.”
We will explore the process companies undertake to make layoff decisions, highlighting the key considerations and principles involved:
Before making any layoff decisions, companies conduct a thorough strategic evaluation. This involves assessing the organization's financial health, future projections, and overall business goals. By understanding the larger context, companies can identify areas of inefficiency, duplication of roles, or restructuring needs that may require reducing the workforce.
To ensure fairness and transparency, companies establish objective criteria for selecting employees to be laid off. These criteria may include factors such as job performance, skills alignment with future needs, seniority, or specific business requirements. It is crucial for companies to communicate these criteria clearly to all employees, demonstrating a commitment to fairness and equal treatment.
Consideration of alternatives
Before resorting to layoffs, responsible companies explore alternative measures to mitigate the impact on employees. This may include implementing hiring freezes, reducing work hours, offering voluntary retirement or early retirement packages, retraining programs, or internal redeployment opportunities. The goal is to exhaust all options that allow employees to maintain their livelihoods and preserve their sense of belonging within the organization.
Consultation and collaboration
In the decision-making process, companies engage in consultation and collaboration with various stakeholders. This includes involving HR professionals, department heads, and, in some cases, employee representatives or unions. By seeking input from diverse perspectives, companies can gain valuable insights and ensure a more comprehensive evaluation of the potential impact of layoffs.
Deciding whom to lay off is a challenging responsibility that companies must approach with careful consideration and fairness. Understanding the importance of treating employees with respect and dignity, even in difficult times, comes first.