Employment: The Corporate L-Word
"Are consumers afraid to spend, or just broke?” So asked the heading of a recent New York Times letter to the editor.
If your business is still struggling to overcome the disaster that was last year — one of the worst economic meltdowns in living memory — you need to focus even more on restructuring, cutting costs and, yes, laying people off if you want to recover and survive.
Not even the mighty L.L. Bean is immune to soft sales and the falling economy. Bean President/CEO Chris McCormick announced to employees at the end of last year that cost-cutting measures such as voluntary retirement incentives, the canceling of six new store openings, and a high likelihood that “layoffs are forthcoming” all loomed due to a bleak forecast for 2009 — a scenario to which most catalogers can relate.
Since personnel is a company’s largest expense, letting people go is likely on your radar. But if you’re not using best practices to downsize, it could cost you. Your reputation, retention rate, employee morale and other key factors all could suffer. You also run the risk of employee lawsuits.
If you let people go, you’ll deal with these questions and more.
- Last hired, first to go?
- Is Friday better than any other day of the week?
- What about the end of a pay period?
- Should you offer two weeks’ severance or more?
According to a recent article in the Guide to Human Resources housed on About.com, your first move should be speaking with an attorney or consultant who specializes in layoffs. The answers may depend on the practices your company has used before, and a variety of legal and ethical guidelines, many of which are spelled out by your local department of labor.
One suggestion might be the elimination of an entire department, with the managers deciding whom they could most afford to lose based on individual job description. Be careful not to discriminate against any protected classification. Apply the criteria for layoff selection equally across all departments.