How to Lay Off Employees with Dignity & Compassion

In extraordinary times — no matter how great the workplace — layoffs can be hard to avoid at organizations large and small. Here’s how to do layoffs with dignity and trust.

If you were to ask managers around the world what part of their jobs they disliked the most, there’s a good chance you’d find laying off employees at the top of the list. Layoffs may be critical to a company’s survival and future success, but they are among the most challenging tasks for management.

What, then, should employers do when faced with the prospect of letting people go?

How to lay off an employee with dignity

Great workplaces find ways to maintain trust, even when tough economic times call for layoffs. Our research has shown that companies who build trust during difficult times experience faster recovery to their business and to their brand.

How layoffs differ from furloughs

A layoff is permanent and initiated by big changes, such as the need to cut costs, downsize, and restructure an organization. A furlough is a temporary layoff — affected employees are still legally employed by their company, but can neither work nor earn money. In both cases, the employee is not considered at fault.

We looked at Great Place To Work? data from the Great Recession to see how leading organizations navigated those tumultuous days. Our historical research and culture consulting with leaders at Best Workplaces? navigating through crises found a number of common practices:

1. Promote a culture of listening

When leaders and managers focus their time listening to their people, they are better equipped to have tough conversations when layoffs are necessary.

When you really know your employees as people, rather than merely workers, you know what they value and what style of communication resonates best. You can have the conversation knowing how to best respond to their needs.

For example:

Longtime employees might need reassurance that the layoff wasn’t due to poor performance

Caregivers might be more focused on what the sudden drop in pay means for their family

Everyone reacts differently during stressful situations, but knowing who they are and what is important to them can help you be more sensitive and focused, making a difficult conversation more compassionate.

2. Support your managers

For many leaders, the need to lay off an employee is the most difficult part of their position and counts among their most unpleasant tasks.

Support your leaders by providing the tools and resources needed to deliver difficult news so that they feel more prepared for these conversations.

Some ways you can offer support :

Meet with senior managers to acknowledge their challenges, unpleasant tasks ahead, and the importance of their role, as well as to describe your organization’s comprehensive approach for supporting employees — linking it to company values

Call on experts in grief or resiliency training

Create a forum (whether an online chat channel or recurring meeting) for leaders and HR to talk about employee reactions and how to answer difficult questions that come up

3. Communicate transparently and often

Open and honest communication will help employees understand how the crisis is affecting the company. This can create a greater understanding of the difficult decisions and the negative impact that follows.

While you don’t want to elicit fear or panic, employees do want to understand how their employer is faring in these tough economic times. People will be more resilient if they understand how outside forces are impacting their job, their profession, their industry, and their company.

When layoff details are announced, leverage all levels of leadership in the discussion, with the goal of consistent, clear, and effective two-way communication. For example, the CEO can host a town hall for the entire company. Then, general managers can host smaller sessions with business units, and an individual manager can lead a session for their own department.

Many leaders at great workplaces send regular videos recorded from their smartphones. These messages are imperfect but vital to sharing information timely and sincerely. Employees value this authenticity.

This sends a much stronger and more compassionate message of care, openness, and authenticity — things we all need and hold onto in times of insecurity.

4. Offer internal or external support to help affected employees

How an employer handles the layoff process and the following transition tells a lasting story of an organization’s culture. For this reason, we recommend going above and beyond what is expected. Extend extra care to employees during this challenging time.

The best companies provide resources, including:

Time for employees to process, gather their belongings, and say goodbyes

A severance package and extended health benefits

Transition counseling, outplacement services, employee assistance, COBRA coverage, and resume preparation

Assistance with programs and services such as unemployment benefits and new job retraining

Introductions to, or job listings from, other local employers who may be hiring

Written and verbal references to enhance employees’ job-seeking efforts

5. Follow up with laid-off employees

An employee’s relationship with a company shouldn’t end when they are laid off.

Your HR team can reach out to employees following their departure to:

Check-in on their well-being as a whole person, not just a worker

Provide tips or updates on any job connections made with other employers

Remind them of resources that continue to be available, such as unemployment insurance

Ensure they know that they can be rehired at a later date to replace attrition or for a new position

6. Engage and support your remaining employees

Following a layoff, remaining employees often feel “survivor’s guilt.” After all, the employees who left were their colleagues and friends. Left unaddressed, such feelings of guilt can sap morale and hang over your company culture, endangering its reputation and future.

Here are a few examples of ways you can combat this:

Engage with remaining staff often to explain how the organization is helping those laid off and share whenever placements for new employment (internal or external) are successful so they can see the extension of care and respect

Create space in meetings for employees to talk about how they are coping with the bad news

Increase support to ensure employees have the resources they need, since remaining employees may be putting in long hours and picking up extra work

Remind them about resources, such as the EAP and employee resource groups, so they can share and process their experiences

Consider extra measures, such as the HR team repurposing their time to make personal calls to every employee to see how they are doing and what they need for support.

We’re here to support you through workforce changes

Large-scale layoffs can leave remaining employees nervous and anxious about their increased workload and overall job security. Through detailed surveys and data analysis, Great Place To Work Certification? can pinpoint exactly how your employees are feeling — right now. This helps you target your valuable dollars to preserve and improve the company culture you’re known for. Get started with your Certification to reveal exactly where you need to allocate resources to make the biggest impact.