February 16th, 2009
by Jimmie Wilkins
All businesses have ups and downs, and in today’s economy, some employers are faced with downsizing. We are working with many business owners facing this heart-wrenching decision now and we seeing the pain. Many times small businesses feel more like family than work. However, “This is going to hurt me as much as it hurts you” are hollow words to a staff member losing their job. No matter what you do or say, letting employees go is never easy. If you find yourself here, think of how you can prepare yourself and your staff for this situation.
For the staff member(s) being laid off:
- Break the news early and give them a chance to get their financial house in order and their job searches under way. Even if your company doesn’t have to comply with the federal Worker Adjustment and Retraining Notification Act, known as WARN (requires companies 100+ employees to give 60 days notice), take the high road and tell them as early as you can.
- Provide written documentation for all benefits that your business will offer.
- Be familiar with filing for unemployment insurance. Many people have never had to do this and anything you can do to help is important. Workers should go directly to www.workinginoregon.com and file their claim as soon as possible. Note they do not have to wait a week before applying. File for Unemployment Online is on the right side under “NOTICE”.
- Don’t promise to notify them of job openings unless you really intend to follow through.
- Refer them to the stae employment office job bank.
- Be prepared to handle requests for referrals and job verifications.
- Let the terminated employee know whom prospective employers should contact.
Before you even get to this point:
- Review and familiarize yourself with all pertinent information in your company’s personnel policy or handbook.
- Consult your attorney or an employee-relations specialist who can advise you about sticky issues.
- Establish criteria that are neutral and nondiscriminatory for reducing staff. Avoid a lottery system or selecting employees based on age or other criteria that might be viewed as discriminatory.
- Once the standards are established, apply them equally and make no exceptions.
- Make sure personnel files and performance reviews are up to date and contain any documentation that supports your decision about whom to lay off and whom to keep.
- Consider the expenses your company will incur as the result of a layoff, including severance and insurance costs. Worker’s Compensation works like any insurance model. If you have had many claims - chances are your rates may go up.
After the layoff(s):
- Tell the remaining employees the reasons for the layoff.
- Convey your regrets about the situation.
- Encourage employees to ask questions, and do what you can to help them through the transition.
- Avoid discussions of why one person was retained over another.
If a layoff is an economic necessity for your company, remember that it is only temporary. A little caring and sensitivity now will pay off down the road when you are hiring again.
Jimmie Wilkins is the director of the Chemeketa Small Business Development Center.
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