How To Conduct a Layoff: A 15 Step Guide For Startups
Making the decision to conduct a layoff is never easy. There are many legal and emotional considerations that come into play, and it can be difficult to know how to proceed.
In this guide, we will walk you through the process step-by-step, so that you can make the best decisions for your business and your employees. We’ll cover everything from notifying employees of their termination, to dealing with possible reactions, to leaving employees with a positive impression of your company. Follow these guidelines, and you’ll be able to conduct a layoff that is respectful and professional for all involved.
How To Conduct a Layoff
It’s never easy to make the decision to lay off employees. But if you’ve come to the conclusion that it’s necessary for your business, there are some things you can do to make the process as smooth and humane as possible.
There are many reasons why businesses may need to lay off staff, such as financial difficulties or a change in company direction. Whatever the reasons, it’s important to remember that layoffs are difficult for everyone involved. As the manager or business owner, you will need to be prepared for a range of possible emotions from your employees, from sadness and anger to shock and disbelief.
It’s also important to understand the legalities surrounding layoffs. There are strict rules and regulations that must be followed in order to protect both your business and your employees. Familiarize yourself with these before proceeding with any layoffs.
Once you’ve done this, you can begin planning how to conduct the layoff itself.
15 Steps For Conducting a Layoff
There are different ways to go about conducting a layoff, but there are some key steps that should be followed in all cases. By taking the time to plan and prepare for the layoff, you can make sure that it is handled in the most respectful and professional way possible.
Here are 15 steps for how to conduct a layoff:
1) Choose who will deliver the news
This is often the most difficult part of the process. You will need to choose someone who is capable of delivering the news in a clear and concise manner, while also being respectful and compassionate. This person will need to be able to answer any questions the employees may have, and should be prepared for a range of reactions.
2) Get Senior Leadership on Board
Before you proceed with any layoffs, it’s important to get senior leadership on board. They will need to sign off on the decision, and will also be able to provide support and guidance throughout the process.
3) Pick a Day and Time
The day you break the news is crucial, so be sure to choose a day when as many of the senior managers will be in as possible. It’s also important to choose a time that lets those who are leaving have a few hours to leave the building and still gives you enough time to talk with the remaining staff and help boost morale.
4) Prepare Final Paychecks
Prepare your final paychecks with your bookkeeper, which should incorporate pay for the entirety of their last day as well as all earned vacation time. Some states necessitate that you give employees their final paycheck on their last day; others require it on the next scheduled payday or within 72 hours. To be certain you are in compliance with your state’s law, giving employees their check on their last day is advisable.
5) Prepare Severance Package
If you want to give severance pay, write a check that the employee will get in exchange for them not suing you over the termination. You’ll need an appropriate release signed by the departing employee.
Employment laws requirements are different from state to state in this area, so speaking with an employment lawyer about the release is advised– especially if there’s suspicion that the employee might take legal action.
6) Security Should Be On Standby
Depending on the size of your company and the number of employees you are laying off, you may want to have security on standby. This is not always necessary but can provide peace of mind and help prevent any potential confrontations.
7) Secure Computer System and Files
If the employees who are being laid off have access to your computer system or sensitive files, be sure to change passwords and restrict access as soon as possible. You don’t want departing employees to cause any damage or take any company secrets with them.
8) Notify Customers and Vendors
Your customers and vendors should be made aware of the layoffs as soon as possible. This will help prevent any disruptions in service or communication.
9) Notify The News All at Once
Once you have everything prepared, it’s time to notify the staff of the impending layoff. The most important thing to remember here is that everyone needs to be notified at the same time. This includes those who are being laid off as well as those who are staying.
10) Be Respectful and Compassionate
When you’re delivering the news, it’s important to be respectful and compassionate. Remember that this is a difficult time for everyone involved, and try to be as understanding as possible.
11) Offer Resources
If you can offer resources to those who are being laid off. This might include help with writing resumes or advice on job hunting. You can also provide contact information for employment agencies or job websites.
12) Answer Any Questions Employees May Have
Your employees will likely have many questions about their termination, such as how long they have before their last day, what severance pay they will receive, and whether they are eligible for unemployment benefits. Be prepared to answer these questions as best you can, and direct employees to any resources that may be of help.
13) Provide Support During The Transition
Losing a job is a difficult experience, both emotionally and financially. As such, it’s important to provide as much support to your employees as possible during this time. This may include offering outplacement services, help with job search efforts, or financial assistance.
14) Follow Up With Departing Employees
After the layoffs have been completed, it’s important to follow up with the departing employees. This can help them feel valued and appreciated and will show that you are still interested in their well-being. You can do this by sending a handwritten note, sending an email, or giving them a call.
15) Hold a Company-Wide Meeting
If possible, hold a meeting with your remaining employees on the same day as the lay-offs. Be honest about what happened and why to gain their respect. You don’t need to go into great detail about finances, but you could show them a few slides illustrating your business’s financial situation.
Conducting a layoff is never easy, but there are ways to make the process less painful. By being prepared, respectful, and compassionate, you can help your employees through this tough time. And by following up afterward, you can show that you still care about their well-being.
We all know that starting a business is hard work. But sometimes, the hardest part is knowing when to let go.
NOTE: We are not lawyers.
This is not legal advice. If you have any questions, please consult with an attorney. The information provided here is general in nature and may not apply to your specific situation. Nothing in this guide is intended to substitute for legal advice. You should consult with an attorney to address your specific needs. This information is provided “as-is” and without any warranty, express or implied. Use of this information is at your own risk. This document does not create an attorney-client relationship. What works for one company may not work for another. Please use your best judgment when following any advice found on the internet. Thank you.