The layoff process is getting more supportive but it comes with complexity.
Even in an economy with low unemployment, companies must retool workforces and redirect investments to accommodate marketplace changes. That means layoffs will be necessary from time to time. Large reductions in force in the media and retail sectors have been in the news lately, raising questions among employers across all industries about the issues involved in laying off workers.
The recent layoffs of former Time Inc. staffers by Meredith Corporation, a media group, generated some controversy. Coverage of the event includes speculation that the company held the number of people laid off to under 250 and classified layoffs in other areas as separate events to avoid the legal requirement of having to file WARN Act notices.
According to the U.S. Department of Labor, the Worker Adjustment and Retraining Notification (WARN) Act, “protects workers, their families, and communities by requiring employers…to provide at least 60 calendar days advance written notice of plant closings and mass layoffs affecting 50 or more employees at a single site of employment.”
The WARN act also has stipulations for layoff accounting for more than 33 percent of the total number of employees, which may mean it’s triggered for less than 50 employees, depending on the overall size of the company and the state in which the company presides.
Employment attorney Alix Rubin notes that the length of the notice may differ by state, with some states requiring a lengthier period, such as New York, which requires 90-day notice. Rubin says she generally advises employers to give employees as much notice as they can when planning layoffs and urges them to comply with WARN Act standards, even when they aren’t subject to the law due to size.
“Companies have to weigh many factors when contemplating a layoff, including WARN Act requirements and notices to unions, labor commissions, and others as specified by federal or state law,” Rubin said. “But from a morale perspective, it’s usually a good idea to give employees as much notice as possible and to provide incentives for key staff to stay if attrition before the termination date is a concern.”
Many companies—depending on the size and scope of the layoff—aren’t subject to the WARN Act when instituting a reduction in force. And, as was the case with the Meredith layoffs, larger employers may not be required to file WARN Act notifications if the reduction in force takes place in smaller increments across various locations. But for company leaders and HR professionals involved in layoffs, there are many other tactical and strategic considerations for giving employees advance notice—beyond WARN compliance.
The Modern Workforce
Today’s workforce is more fluid, in the sense that it’s unusual today for people to work at the same company for their entire careers. It’s not uncommon for employees to leave a company, either via a layoff or by voluntarily moving on to another job, and then returning to that same employer some time later. In HR, this practice is sometimes called boomeranging. Former employees may also reappear as customers, competitors, or advisors.
Relationships are critically important in today’s economy, both because the workforce is more fluid and because today’s employees are interested in their employer’s values. More than ever before, employees have the means to explore and discover employer values and how they live them out in new ways, such as social media and workplace transparency sites like Glassdoor. In an economy increasingly based on relationships, employers interested in a positive public image must go beyond simply meeting requirements to taking extra steps protect their brand image.
For employees, the stress of losing a job is often second only to the loss of a loved one. It’s crucial that organizations recognize the emotional impact of their financial decisions and treat people with respect and sensitivity. Best practices dictate that employers inform impacted employees on a one-to-one basis, outlining severance benefits and expressing appreciation for individual employees’ services and contributions to the organization.
The Next Step
Employees in a layoff situation will understandably focus on landing on their feet. Employers can partner with laid off employees by providing outplacement services so that employees receive services like career coaching, resume writing expertise, and relevant job leads. Providing outplacement services sends the message that the employer cares and is living out stated values, while helping employees prepare for the job search.
Outplacement services can also deliver significant benefits to employers. Besides helping to protect the employer brand, former employees who find work quickly will have less of an effect on future unemployment tax liability. In addition, Federal Reserve Bank of Chicago study cited by SHRM found that strong outplacement services could help a 1,000-employee organization that was laying off 100 employees avoid approximately $1.4 million in wrongful termination lawsuits.
Whether subject to WARN Act rules or not, employers who must reduce their workforce will have many important decisions to make. To make the workforce restructuring as smooth as possible, focus on building trust in the workplace, be as transparent as possible with employees, and offer transitioning staff the help they need. In this way, company leaders and affected employees can move on to the next phase without regrets.