How to Perform Layoffs Fairly: Insights from HR
Johnny C. Taylor Jr. addresses your HR inquiries in this series for YSL News. Taylor serves as the president and CEO of the Society for Human Resource Management, the largest HR professional organization globally, and is the author of “Reset: A Leader’s Guide to Work in an Age of Upheaval.”
Question: We are considering workforce reductions due to a shift in our business model. What is the best approach to decide which employees will be affected? We have several employees nearing or at retirement age, but we want to avoid any age discrimination issues. Should we adopt a “last in, first out” strategy, or should we consider performance and attendance instead? Although we wish to avoid layoffs, our current staffing levels are no longer necessary. – Austin
Answer: Handling layoffs or workforce reductions is a complex task. It can create tension for both employers and employees, and one of the biggest concerns is the risk of legal issues. Companies may need to downsize for numerous reasons—such as restructuring, budget constraints, outsourcing, or mergers. It’s important for employers to rely on valid business reasons when deciding which employees to let go, in order to prevent claims of discrimination or legal repercussions.
One approach is to use seniority to guide decisions, often called “last in, first out.” This method is commonly viewed as equitable because it acknowledges the service of long-term employees. It’s also easier to defend with adequate documentation.
Alternatively, you might consider a merit-based system, which focuses on keeping the top performers. It’s vital to have objective and well-documented performance evaluations, as any lack of solid performance records could invite discrimination claims.
Another strategy is to use a mix of criteria such as seniority, performance, knowledge, skills, attendance, education, and experience. By having robust documentation for this multi-criteria ranking system, you can achieve a fair balance between retaining top talent and honoring long-serving staff.
Instead of layoffs, some companies choose to offer early retirement packages to select eligible employees. However, this approach should be approached carefully, as the costs may outweigh the benefits if it does not achieve the desired number of separations.
Employers might also consider implementing salary reductions as an alternative to layoffs. Ensuring uniform pay cuts across the board can maintain fairness while making necessary financial adjustments. Additionally, reducing employee benefits or other perks is another viable option to safeguard jobs.
Ultimately, layoffs and workforce reductions are complicated processes, but sticking to objective and non-discriminatory criteria can help employers mitigate risks. Consulting with legal counsel is also essential. The key is to approach the layoff process thoughtfully, ensuring decisions can be justified if challenged.
I work for a restaurant corporation that lacks an on-site HR representative at its locations. We only have HR support available during the year-end open enrollment period. Outside of this time, employees are directed to an internal HR website. How can I obtain detailed answers to my benefits questions? ‒ Sanaa
It can be frustrating to tackle important benefits inquiries without a direct point of contact. HR should ideally be a dependable resource for employees, especially regarding benefits that affect their well-being. Although having HR support limited to open enrollment makes access challenging, there are strategies you can use to find the information you need:
◾ Consult your manager or peers. Your supervisor may have insights or prior experiences that could help you navigate this situation, and coworkers might have encountered similar questions and can share their resolutions.
◾ Utilize the internal HR site. While it might feel impersonal, many companies host extensive resources on their HR portals. Look for FAQs, benefits guides, or forms to submit specific questions. Some systems may even offer live chat options or callbacks.
◾ Identify a third-party administrator. Some organizations outsource benefits management to external firms. If applicable, the HR website should provide contact details for the third-party administrator or their customer service line for more tailored support.
◾ Check your employment documents. Review your job offer letter, onboarding materials, or employee handbook, as these documents often summarize benefits or provide contact information for further queries.
◾ Advocate for better access. If these steps do not fully address your needs, respectfully communicate your concerns to your management. Explain how access to timely benefits information supports employee satisfaction and productivity, and recommend that HR availability be improved beyond just the enrollment period.
Keep in mind that you’re likely not the first person on your team to encounter this situation. Once you find the answers you need, consider sharing your findings with your colleagues and manager, so they won’t struggle in the same way. Everyone at any level can contribute to a better workplace.
Employers stand to gain when employees have the necessary resources to understand and utilize their benefits. I encourage you to take a proactive approach in seeking answers and exploring all available options, and I wish you success in resolving your concerns.
The views expressed in this column are those of the author and do not necessarily represent the opinions of YSL News.
