Reductions in Force: What About Those Left Behind?

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Few, if any, industries are immune to the global economic recession that has led to millions of lost jobs across the United States. Despite crunching the numbers and considering alternatives, employers are often forced to conclude that layoffs are necessary to keep the business afloat.

Employers need to focus on determining which employees remain vital to execute the company’s critical functions, ensure that protected classes are not disparately affected, notify affected employees in advance as required by federal and state WARN Acts, and have a plan for discharging those employees that maximizes their human dignity and minimizes disruption to business operations, according to Pepper Hamilton LLP, a multi-practice law firm in Boston.

“Employers should also consider their remaining employees, who will watch their friends and colleagues lose their jobs,” says Steven R. London, a partner in the law firm of Pepper Hamilton. “It’s critical to ensure that your remaining employees maintain their morale, and that they stay motivated under the pressure of trying to maintain operations with a decreased workforce. This is a critical, but often overlooked, aspect of any downsizing plan.”

London suggested employers consider these points to get the most out of employees in difficult circumstances:

1. Carry out downsizing respectfully.

Nothing can poison employees’ morale faster than watching their former colleagues be shown the door abruptly and disrespectfully. Remaining employees will wonder when their turn to be so treated will come. When downsizing, help maintain the dignity of those who are losing their jobs by:

• Notifying them of the decision in private.  
• Allowing them to say goodbye to their colleagues and transfer their responsibilities in an orderly way.
• Providing them, if possible, with outplacement services to ease their transition to other employment.
• Refraining, unless absolutely necessary, from escorting discharged employees off the premises as if they are suspected criminals.

London says the remaining employees will note how you treat those being let go, and will quickly determine whether your company truly appreciates the ‘human’ nature of its human capital.

2.  Clearly communicate what’s expected of the remaining employees.

“Remaining employees may first wonder how their departed colleagues’ work will be accomplished. The downsizing may be accompanied by a company restructuring, and the remaining employees will most likely receive new assignments or duties to maintain the business’ operations,” London says. “To reduce uncertainty and anxiety among remaining employees, employers should proactively communicate the expectations before the downsizing, to ensure a stable and smooth transition to the new operating model.”

3.  Recognize that remaining employees may have ambivalent feelings.

Employers easily can assume that remaining employees are grateful to still be working and will be motivated to work hard to remain employed. But London notes that while employees will no doubt appreciate their continued employment, they can feel “survivor’s guilt” in being spared layoff while their colleagues were not as fortunate.

“Employees also may be angry with management for discharging their colleagues and expecting them to take up the slack with no more pay,” he adds. “They may be afraid and anxious that they will be the next to go, or unmotivated and dispirited, thinking that even their best efforts may not be enough to keep them working. Employers should recognize that these emotions are normal and inevitable in the aftermath of a downsizing.”

Employers should acknowledge the challenges remaining employees face and allow opportunities for employees to express these emotions by maintaining an open-door policy, London says. What’s more, employers should host regular meetings to discuss ongoing challenges that allow time for employee venting, and, as possible, empower employees by including them in decisions on restructuring and reallocating the work.

“Don’t forget, however, that the viability of your company also depends on having employees who recognize their role in the downsized business, who are motivated to contribute to the company’s ongoing success, and who understand that they remain employees of a business that values them not only for their work, but as people,” London concludes.

Pepper Hamilton LLP (www.pepperlaw.com) is a multi-practice law firm with more than 500 lawyers in seven states and the District of Columbia. The firm provides corporate, litigation and regulatory legal services to leading businesses, governmental entities, nonprofit organizations and individuals throughout the nation and the world. The firm was founded in 1890.