A Better Way to Handle Layoffs

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When you're communicating the news to the employees affected, make sure you have the person's manager and an HR specialist in the room. You want others to document the process, and to answer questions the employee may have about his or her benefits. If you have a union representative, you'll need to communicate with that person and examine the collective bargaining agreement as well.

How much information do you give them?

I suggest you don't go too far into the details, but just inform them that their job has been eliminated effective on a certain date. Tell them you're providing job counseling, or a referral to a temp agency, if you can do that. If they ask why, use those objective metrics that we mentioned, telling them that you looked at sales figures over the last year, and set a certain criteria for those whose jobs were retained. Be honest, be consistent, and be objective. You want to conduct the meeting as respectfully as possible. Don't make false promises, and don't over-praise them or their performance.

What information do you give the rest of your employees and when?

Communicate with your remaining workforce immediately after the layoffs. You want to continue to motivate them, yet be honest about the economic downturn that put you in this position. Remind them of the earlier steps you took to avoid the employee reduction. Emphasize that you want to give them some input on how you can continue to cut costs or make other changes. You'll also need to assure employees whose jobs may include new responsibilities that they will get the appropriate training.

This has to be a nerve-wracking time for everyone. How do you reassure your remaining employees that they're not next?

Let them know that you're still personally committed to providing a quality product and excellent customer service. Tell them how important they are to those goals. However you have to also be honest about the future and don't guarantee there will always be jobs at your company. I suggest that you not focus on that, but on promising them that you'll continue to communicate and be as up front with them as possible.

Karen E. Klein is a business journalist who covers small-business issues for several national publications. She writes her Smart Answers column twice a week.