Letting an employee go is never easy, but the task is especially hard when the reasons for the dismissal aren't performance-related. Perhaps your company is downsizing for economic reasons, or maybe you're phasing out the employee's position altogether.
Layoffs can be traumatic for all parties and should be conducted with a great deal of thought, care and sensitivity. Review the following steps to ensure you're handling the situation correctly.
While a small-business owner is usually free to cut jobs as finances and the situation dictate, you still want to be sure you're in full legal compliance. Contract employees may be protected from certain kinds of layoffs, and you can't let someone go for discriminatory or retaliatory reasons.
If your business is going through an economic hardship that will require layoffs, acknowledge the situation immediately to your team. While your inclination might be to protect them from the bad news, chances are good that they suspect it anyway. Timely and thorough communication with your employees at every step of the layoff process can help prevent feelings of betrayal and disrespect.
The employee you're dismissing now may go to work for one of your clients, suppliers or competitors. You might even rehire that person in the future. Keep trust intact by being as upfront and transparent as possible, so they know what to expect.
Deliver the message privately, respectfully and in person. Get right to the point without engaging in small talk, and then listen to your employee's reactions and concerns. Allow ample time for your employee to process emotions and ask questions. A termination affects each individual differently, but it's certain to have some kind of impact on the person's career, livelihood and self-esteem. Be as kind and gracious as possible.
Make it clear to your employee that you are willing to do everything possible to help them secure new employment. Use your network of contacts to explore available job opportunities, provide a strong written reference, and consider covering the cost of access to a job-search or resume-writing service.
Be as generous as the budget allows when it comes to severance benefits. You want your employee to feel as supported as possible during this time of financial uncertainty. Severance benefits could include items such as:
- Salary continuation.
- Vacation pay.
- Employer-paid period of medical benefits coverage.
- Employer-paid COBRA premiums.
- Outplacement services.
If you need a key employee to stay on for a specific time, perhaps to train another worker, offer a bonus for the person's continued contribution.
Terminating an employee often affects other staff members in your company. Maybe their workloads increase as they pick up the slack. It's likely the employees who survive the cutbacks are feeling nervous about the security of their own positions.
Share the strategic goals that necessitated the workforce cuts with your team. This will help keep employee morale high and give them reasons to feel confident and optimistic about their future with you. If they've observed you treating their laid-off colleagues with fairness and respect, it will be easier for them to trust you and remain productive.
