Employment: The Corporate L-Word
Retain Top Talent
The “last hired, first to go” rule isn’t recommended. Doing so may eliminate many experienced recent hires or young, diverse talent. There should be a business case made for each layoff. Some companies eliminate shifts. Other companies have all employees take an unpaid day every two weeks. Be creative; layoffs may not be your only answer.
Eliminating a position, such as all clerical employees, and shifting that work to managers and staff is as routine as telling each department it must downsize by 10 percent. While seeming “fair,” this may be bad for your business because essential positions will be cut.
Job Search in Mind
Consider layoffs as close to the beginning of a week as possible so people can immediately apply for unemployment and start their job searches. The last thing you want to do is to create a situation where people are mourning, fretting and becoming angry over a weekend when their opportunities to act are limited.
It’s recommended that layoffs occur as soon as the business need makes them necessary. Be prepared to have ready a severance package and a legal document releasing your company from liability. Laws regarding these may differ from state to state, so you should check with your state department of labor. Employees generally have a certain number of days to respond and a certain number of days during which they can change their minds about signing.
To learn more about employee entitlements for unemployed workers, written from the worker’s point of view, read “Entitlements of the Unemployed.”
Depending on your business and the number of layoffs you’re contemplating, the WARN Act provides legal guidance about when employees must be notified of upcoming layoffs. Learn more about the WARN Act and employee lawsuits here.