How do you successfully navigate layoffs and reduced working hours?

Layoffs and reduced work are difficult enough to deal with in regular times, let alone amidst the uncertainties and stress of a global pandemic. Here’s what we’ve seen organizations do to successfully navigate these difficult decisions.

Consider all options, and get creative. First and foremost, leaders need to consider all different options to cutting costs, and balance these with their purpose and culture. From what we’ve observed, some organizations have chosen to ask all employees to collectively take a percentage pay reduction, rather than perform any layoffs. For example, CNRL has implemented a 10 percent pay cut across salaried employees, with leadership taking between a 12 to 15 percent pay cut, and their president taking a 20 percent pay cut. This can be beneficial to morale, and establishes a sense of togetherness and unity against difficult times. Other variations of this are KPMG’s 20 percent pay cut for four months for anyone earning more than $62,000 a year, with equity partners taking a 36 percent cut, or Grant Thorton offering UK staff a voluntary leave of absence. Some have even turned to reduced working hours, in which the reduced hours are shared amongst all employees, which is known as work-sharing. Finally, some CEOs have opted to shoulder the salary cut alone, or even forgo their salary for a period of time to be able to retain staff.

Communicate transparently with empathy. As we discussed in previous weeks, empathy and compassion are key. With difficult decisions, having knowledge of what considerations were made can help temper negative reactions and increase perceptions of fairness, especially if the messages come personally from leadership. If layoffs do need to happen, try and conduct them through a video conference or phone call. This can help reduce miscommunication, and allow for more sincerity. It is also important to be available and communicate frequently with all employees. “In times like these, your remaining employees will look to you for comfort — and an explanation...hold an “Ask Me Anything” session — an open forum of sorts — so that “rumors don’t take over.” 

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This work has been funded by Viewpoint Foundation.