Globally, as we navigate a tough economic climate as a result of COVID-19, layoffs a.k.a. reduction in force (RIF) and furloughs have become a mainstay in the media, and a reality for many businesses. As these are not everyday occurrences, most executives are under prepared to rollout and communicate such an emotionally charged change within the business.
This document is not intended to address the business decisions and work force analysis which should happen before moving forward with a RIF, rather, it suggests best practices and items to consider when communicating and implementing the strategy. This is about reputation management, as well as people considerations.
We cannot understate the importance of planning ahead and considering multiple scenarios before your first communication about team downsizing. The challenge to rebuild after a RIF becomes exponentially harder if there is more than one layoff. During the post-layoff recovery period you are asking remaining employees to trust in your leadership team – rewarding this trust with another layoff a few months later is a morale killer – it can take years to build back a culture where employees feel secure in their job and trust management. Where possible, plan and execute the RIF so that only one round of layoffs will be necessary.
Every communication plan needs to be adapted to your company culture, your leadership team’s current methods of communication, and managed relative to the size of impact. Even before the RIF, leaders need to analyze the future restructured organization and identify at-risk employees who are most likely to be impacted by losing close colleagues, a role change or a workload increase.
Lastly, these recommendations have been written with a lens on the COVID-19 remote-work environment and are designed to mitigate the challenges of not having in-person communications.
As there is no step by step playbook for this type of situation, we will look at a communications strategy based on these four “C’s.”
Compliance
Compassion
Communication
Culture
Compliance
As communicators we assess business decisions against future goals and play out scenarios to identify possible outcomes. It is against these potential outcomes that we build a communications strategy. When dealing with a “force majeure”, a scenario that’s out of management’s control (like the current economic downturn), we may expect that our audiences will have a heightened level of understanding around business decisions. While to some degree this is true, this is overlaid by a sense of confusion, hurt and hardship in the broader community, and sentiment towards a business can change rapidly and aggressively.
Let’s start with the assumption that the financial and business reasons for your RIF are well thought out, fair and justified given the economic backdrop and context. On some level, this reality is something that many, even those impacted by a RIF, will be able to understand. However, losing one’s job personal and emotional and it not difficult for an individual to feel personally wronged.
Given this, it’s more critical than ever to ensure that you are compliant with state and federal laws. Contravention of these would be those actions that you cannot “communicate” your way out of.
As part of your compliance analysis, create a detailed business case for the purpose of the layoffs, and the people it is affecting. When it is written in black and white, ensure that there are no areas of grey. The non-compliant, or grey areas are where you are most likely to lose control of the situation down the road. The talking points of your business justification will be used by all company leaders to ensure the same information is shared during meetings and in company-wide communications.
How a company handles a RIF will be remembered for far longer than the layoffs themselves
Compassion
The adage that our actions speak louder than our words is a pivotal piece of advice to remember during this time. When a RIF happens, especially during a deluge of information and opinions in the media, work and home-life, impacted people will struggle to remember what is said. They do remember how they felt – so actions and approach will speak volumes.
With that in mind, “compassion” comes in two forms during a RIF:
What You Do – Provide Severance
While a RIF occurs for financial reasons, the cash position of a company is not the fault of the employees being let go. Companies need to offer fair severance and after-termination support. The details of a severance package are not typically intended to be shared publicly, but it often are, and it is the poor severance packages that usually make their way to front page news.
Even for a younger ScaleUp company or a company without runway to extend severance longer than two weeks, there are strategies which will help look after former employees. Consider paying out individuals over a period of time to keep them on health care plans, identify senior executives who can work their networks to help laid off team members seek out new opportunities, or redirect internal HR and recruitment teams to review resumes. If protecting your company brand in a RIF is a priority, these actions should be too.
How You Say It – Be Human
A RIF doesn’t just impact those laid off, it impacts every person within the organization – those remaining often feel guilty that they survived. Management teams must operate with empathy and do everything possible to allow individuals being let go to maintain their dignity.
While we strongly encourage managers to rely on the business case developed to ensure consistency in messaging, it is also important that it doesn’t become a verbatim script. Ensure that you utilize leaders best suited to deliver this information accurately, but with a human touch. If you have young or inexperienced executives, consider bringing in professional help to support the process.
When RIFs occur in the office, we would encourage allowing employees to say their goodbyes and avoid (unless necessary) walking staff out with security in tow. When the RIF is announced via zoom and it happens remotely, the sudden void will be felt by both sides, and feelings of anger and isolation will be compounded. Over-communicate the positive contributions those let go have made and encourage employees who stay on to remain connected with former teammates. This decision to let people go is not personal, but the level of support should be.
Communication
How a company communicates layoffs is by far the most critical component of this business plan. RIF rollout horror stories include burying the news in an ill-worded memo, doing it on a mass conference call, or employees only finding out when their emails stopped working. These sound like works of fiction, yet even during COVID-19 similar stories are hitting headlines. Why? Because the communication plan is left to the last minute. An experienced HR professional will bring an understanding of communications to the table, but their specialty is not communications. From the start, the Head of Communications should be included in the business planning meetings and work alongisde leadership on the implementation plan.
The overarching communications goal is clarity and control – deliver clear information pertaining to the RIF clarity and maintain control of the messaging – both internally and externally.
Before:
- Plan and be prepared. Thoughtful and consistent communications will be best received. The CEO should be the primary spokesperson for all group communications.
- Assume every piece of communication will be made public; base all written and spoken communications on the approved business plan and write everything as if it could be published in a national newspaper. Prepare all emails, FAQs and a media statement well in advance and have everything reviewed by your legal and HR teams.
- Arm your leadership team and managers who will be handling the layoffs with fact sheets, talking points and training ahead of meetings. Make sure they know the business case.
- Ensure you have a strong communication strategy for those staying. Conduct an audit of the remaining employees and identify “at risk” teams or individuals who may be losing close friends or large parts of their team.
During:
- Deliver the message in a 1:1 meeting with the individual(s) being impacted and their manager. As this will be conducted remotely, ensure that video is used and that you allocate at least 30 minutes for the meeting. Be transparent and concise when explaining the situation and what severance or other services will be available to the individual. Thank them for their specific contributions to the business and proactively offer a letter of recommendation. Do not cut the meeting short; let the employee know a second meeting can also be scheduled in three days’ time should they want to collect themselves and reconnect when it is not a shock. While they will not be formally employed, they remain a priority to the leadership time during this transition.
- Conduct the meetings in as short a time period as possible. It should be assumed that some employees will reach out to their closest former colleagues and discussions/ rumors will start. To best protect the employees who will remain, the goal is to get to a piece of all deliver all-hands communication as quickly as possible.
- Make resources available – for emotional support or outplacement support – the day of the layoffs and for the week following. Individuals will process the news in different ways and may need time to come to terms with the situation.
- Call an all-hands video call at the completion of the layoffs. This should happen within a 24-hour period. Be transparent and sincere during the call. Give retained employees access to all the information that you intend to make public and, where possible, explain the severance or the care taken of former colleagues. Allow time for Q&A so that the remaining employees can feel heard.
After:
- Prioritize 1:1 meetings with all employees, and hold more frequent focus groups, to encourage retained employees to speak their mind.
- Be prepared for a rollercoaster of emotions from employees, and don’t assume that if in a week or two when specific questions pertaining to the RIF die down that the concern or uncertainty surrounding it has too. Remain on alert for changes in employee behavior or people pulling back. Continue to encourage the use of video in team meetings to ensure as much face time as possible after the RIF.
- Layoffs, regardless of percentage loss, will change the shape of an organization and there will be changes to roles and responsibilities. Make sure that retained employees know of any changes in their reporting structures, daily duties, and proactively address whether (if) someone’s role has changed enough to warrant a promotion or increase in pay. Even if layoffs have occurred at a time of potential economic hardship you cannot expect employees to significantly increase their workload without being remunerated for it.
Culture
As businesses navigate COVID-19 and remote work policies, company culture and team building have been thrust into the spotlight as the antidote to isolation and productivity loss. After a RIF, this focus is even more critical. A strategy to deepen culture, increase team bonding and motivate employees should be in place before layoffs take place. The analysis of the post RIF org chart to identify employees “at risk” of becoming disengaged will be a useful tool when planning culture and engagement initiatives.
Goals Post RIF:
- Build confidence in the “new” strategy and focus of the business
- Create new bonds and strengthen teams who are remaining
- Invigorate productivity
Here are three creative ideas to foster company collaboration during COVID-19, engineered to build new relationships across teams:
- Strategic Task Forces for Quick Shared Wins – Strategize the “quick wins” for the organization. Perhaps it is closing out a deal that was in the works or standing up a data project that has been on the backburner for a while. See how you can set up and bring in other individuals to participate in its success, so you spread learnings, engagement and ownership.
- Cross Team Hackathon – Hold a cross functional team digital hackathon to strategize fun new projects people can focus on. Remaining employees may have lost friends in their teams, or other teams, and these individuals are more likely to feel unsupported and isolated. A hackathon will help build new relationships outside of day to day work and will help reinvigorate the organization.
- Global Weekly Stand Up – in a post RIF environment, increasing company wide communications is paramount. Your business is likely already having an increased number of team and 1:1 meetings, but a weekly All Hands will help make employees feel connected to the firm and your mission. When working remotely it is easy to feel left out of conversations. Use these All Hands to give important business updates to everyone at once, celebrate wins as a firm and bring on inspiring internal and/or external speakers to keep your employees motivated.
No CEO or executive wants to find themselves reducing their team. Executive teams plan for growth; downsizing only occurs because of financial distress. Even with this context, RIF implementation needs a human lens – and this means ensuring that a good communications plan is at the center of it.
A communications strategy is bespoke for every company. Please reach out to your team at Insight Partners for support in setting up a plan that’s right for your organization during this difficult time.
