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Playbook: Six Ways to Help Your Laid-off Employees

When small businesses decide to lay off workers, they often can't afford generous severance packages or access to professional outplacement services. But employers strapped for cash can still help their departing workers. Take a look at our accompanying story, then see below for six ways to soften the blow of layoffs.

• Tap your network. Reach out to clients, vendors, competitors, and others in your network to see if anyone wants to recruit workers you have to cut. "Before I would let someone go, I would talk to other entrepreneurs I knew," says Dan Cohen, a former owner of a specialized construction firm and now a lecturer at Cornell's School of Industrial Labor Relations. Cohen sometimes shared employees with another company until he was able to rehire them full time.

• Start an online forum to pool talent. Some companies are using groups on LinkedIn or Facebook to connect workers they're laying off with potential jobs or freelance work, says Kathryn Kerge, an HR consultant in New York. "They truly want to see their employees able to find work in the sector when they know they don't have it for them right now," she says.

• Give workers ample notice. Giving employees a month's notice before they have to leave, instead of two weeks or less, will give them a bit more wiggle room, Kerge says. During that time, be flexible about giving employees time for interviews. If you can't give them extra notice, consider letting laid-off employees come in and use the office printer, copier, and fax to prepare for their job hunt, says Peter Cappelli, director of the Center for Human Resources at Wharton.

• Direct employees to local resources. Career centers run by local colleges or government agencies often have résumé writing workshops, career counseling, job fairs, retraining help, and other resources for the unemployed, says Sally Klingel, director of labor-management programs at Cornell's School of Industrial & Labor Relations.

• Give employees an honest reference. Other potential employers may think you laid off workers because of poor performance. "Often the biggest thing [companies laying off staff] can do is offer to write a glowing letter," says Klingel. Explain why workers were cut and vouch for their experience.

• Keep in touch. Business may pick up sooner than you expect. If you maintain a relationship with laid-off workers, you may be able to offer them work—even if it's just part-time—later on if they're still looking, a situation that could benefit both sides.

Tozzi is a reporter for Bloomberg Businessweek in New York.

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