How can a company avoid layoffs

The pandemic forced many C-suite officer and HR leader to make tough decisions about the size and structure of their workforces. Following a year rife with layoffs and furloughs,. Even now, uncertainty looms and more interruptions to how many organizations do business seems inevitable. With vaccine rollout struggling and a lack of public enthusiasm for the spending habits that typically fuel the economy, it seems like more shifts and upheaval in the labor market could be on the way.

Most leaders would rather deal with tight budgets and talent development challenges than the elimination of jobs and having to lay off staff. Most go to great lengths to cut costs first to minimize the number of people affected by a reduction in force RIF.

Telling someone their time with the company has come to a close is never an easy thing. In the midst of a public health crisis that may limit opportunity in some professions even further, it can be even more difficult. To help HR professionals communicate clearly and effectively and set their people up for success in the future, here are 10 strategies for dealing with layoffs. RIFs are upsetting and difficult to deal with for everyone.

Leaders and HR managers should not be expected to smile through it or attempt to make the situation more palpable than it is. Acknowledge that it is painful for all employees—those being let go, those who are staying, and for the HR managers who have to implement the reduction. This is also a good time to be transparent about what is happening within the organization. Answering questions about why the reduction is necessary can help those left behind cope and move forward.

Managers should remain objective when selecting positions to eliminate. They need to be mindful of their words when speaking about the reduction. People are not being cut—positions are cut, and people are affected. They also need to be mindful of their choices. The slightest hint of favoritism or bias will come back to haunt the company on Glassdoor and other sites that rate employers. The lay-off must be well planned and executed, with no details left unsettled.

HR needs to help leaders ask probing questions to determine how positions will be selected. If the downturn only affects one area, will that department be the only one to face cuts, or will the entire company face restructuring? Keep in mind, though, that in tough economic times, your attrition rate will likely slow. If you need to reduce employee pay , benefits, or hours, think through the ramifications of this decision. And these are often the employees who have options. Before considering this business decision, recognize that these actions may cause your best employees to leave, and could damage trust levels across the organization.

A furlough is an alternative to layoffs. In a mandatory furlough , employees take unpaid or partially paid time off of work for periods of time ranging from weeks to a year. The employees generally have either scheduled time off or call-back rights and expectations. Examples of furloughs include closing a business for two weeks, reducing employee time on the job to three weeks a month instead of four, and asking employees to take two days a month off without pay.

Other employees have been put on furloughs indefinitely. In a furlough, benefits usually continue, which is one of the differentiating factors from a layoff. Even so, the negative impact on your workforce can be great, and many valuable employees will likely move on. If you've considered all these alternatives and tried some and documented it , but still find that a workforce reduction is necessary, then you'll have to plan carefully for how to implement the layoffs.

These decisions are never easy, and they're even harder to communicate to your employes. But at least you can show them that you considered every possible alternative. Actively scan device characteristics for identification.

Use precise geolocation data. Select personalised content. Create a personalised content profile. Measure ad performance. Select basic ads. Create a personalised ads profile. Others might have to care for elderly family members who are sick or at-risk. Give employees the option to reduce their hours to four days a week or go part-time for the duration of the crisis, and adjust their pay accordingly.

This way, a company can save on its payroll spend while still keeping workers employed. In certain industries like hospitality, entertainment and retail, COVID has had an immediate and devastating impact on workers.

Many were furloughed or laid off, but some companies have found ways to assist their dismissed workers. When hotel cancellations spiked in March, hotel chains like Hilton, Hyatt and the Marriott all withdrew their outlook statements and began laying off employees. Hilton, however, furloughed many of its staff members and then took action : The chain established partnerships with companies like Amazon, CVS and Walgreens, which are struggling to meet consumer demands during COVID, and expedited the hiring of their displaced workers.

A lean approach to staffing will help companies avoid yo-yoing between overexuberant hiring during growth and damaging staff reductions when demand falls. Before Cote began his turnaround in , Honeywell had a policy of hiring freely during good times and then cutting jobs in downturns. The drastic head count reduction of was too much for Cote, who responded by introducing hiring controls.

Too often managers use layoffs as an excuse to avoid difficult discussions about performance. Lincoln Electric, an arc-welding products and consumables manufacturer headquartered in Cleveland, Ohio, has had a no-layoff policy in its U.

Part of the reason it maintains that policy is that it has a reputation for high-quality and efficient staff, thanks to very strict performance standards and a rigorous evaluation process. Employees are assessed twice a year in five areas.

Performance is competitive within departments, and performance ratings are tied to a merit-based compensation system. Short-term volatility. Experienced managers develop a range of ways to reduce costs without resorting to destructive layoffs. Three approaches implemented by Honeywell, Lincoln Electric, and Recruit Holdings, a Japanese human resources and advertising media conglomerate, demonstrate how much room there is for creative management during downturns.

During the Great Recession, Cote used furloughs instead of layoffs at Honeywell. Having weathered three recessions when he was at GE, he had developed a sense for when a business cycle might run its course.

Two years before any sign that the economy was in trouble, he began to pull back on hiring. Once the recession hit, Honeywell furloughed employees for one to five weeks, providing unpaid or partially compensated leaves, depending on local labor regulations. I kept reiterating that point: There will be a recovery, and we need to be prepared for it.

In , Recruit Holdings developed an innovative system, Career View, through which it hires employees with nontraditional backgrounds as three-year contractors. The program targets rural employees who lack the education and experience to land a job at a major Japanese corporation, hiring them as sales associates for regional offices near their hometowns. Six months after joining Recruit, these contractors meet with career counselors to discuss their goals. Too often managers use layoffs as an excuse to avoid difficult discussions.

Lincoln can avoid layoffs because it requires employees to accept flexible assignments. In addition, they can be reassigned to any other job, including one with a lower salary, for the duration of a downturn. When orders fell during the Great Recession, for instance, Lincoln moved some factory workers into sales. An uncertain future. Market shifts, new technologies, and new competition can require companies to do major restructuring.

Michelin, for one, has embraced transformations as part of its workforce strategy. When Bertrand Ballarin joined the company, in , one of his first jobs was to manage a factory in Bourges, France, that was going to be shut down. He gathered its managers and union reps, explained the situation, and gave them a year to come up with a plan to save the plant.

After analyzing how other Michelin plants were producing airplane tires, one of three product lines handled in the factory, the team concluded that the Bourges facility had a better, more consistent industrial process for making them than the other plants did. The team successfully argued that Bourges should specialize in airplane tires and get a new research center to aid product development. In , Michelin began applying the lessons from Bourges to a factory in Roanne, France, that was at risk of being shut down.

From October to March , more than 70 individuals, including leaders from headquarters, union representatives, plant managers, and employees, met to develop a transformation strategy for Roanne. Instead of the traditional four teams working Monday to midday Saturday, the plant would reorganize into five teams that kept operations running seven days a week around the clock, and all employees would work six additional days a year.

In these cases, companies have to ensure that employees are treated fairly. Datta found that companies tended to get better financial results after a layoff when employees thought it was handled equitably and done for strategic reasons rather than cost cutting. Then-chairman Jorma Ollila was determined to avoid another Bochum. Nokia opened Bridge centers in the 13 countries where the layoffs would take place.