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Previous Issue's Dilemma:
Caught between a hard place and a rock
Our business is way off, and I'm under orders to lay off two of the five people who report to me to cut costs. I've never had to do this before, and I am a total wreck over this. It's up to me to choose whom to let go. If there were two obvious poor performers, it would be a no-brainer, but all of my people are good workers. What criteria should I use? Should I pick the ones most likely to land on their feet?
-- Manager, Accounts Payable Department
Do what's best for your team and company
In these unsettling times, it's no surprise to learn that many readers have faced the same kind of gut-wrenching decisions -- many without much experience at dealing with downturns and layoffs. There's little doubt that the situation calls for equal parts courage and compassion, with a generous helping of communication.
Several readers have opted for the keep-it-simple approach. As one puts it, "If all of your staff are equally good workers, the fair solution is to go by seniority." Others haven't found the situation quite that simple; their advice centers on three approaches:
Put your team and company first
"Your decision should have nothing to do with how likely your employees are to land on their feet," says one anonymous A/P director. "Their skill sets and the company/business need must exclusively guide your decision." First, think long and hard about which of them is most important to the future of your company. Which skill set do you need most? And who has the broadest knowledge base? Those should be your "keepers."
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An anonymous reader seconds that. "Choose to keep those who have the strengths you need most in a down economy," he says. "Who is the most innovative? Who is the most cost-conscious? Who can find creative ways to move the business forward in tough times?" A dose of reality: Who is most likely to pick up the slack with 40 percent of the team gone?
An anonymous manager of accounts payable, puts it this way: "Although you say they are all good performers, there must be a competency that doesn't stack up to the others. For example, personality can be a key factor in A/P. Managers can waste a lot of time on small personality issues. I would look at who is more likely to take on additional duties and get along with others. Also, during staff changes, those who are better at training and don't get frazzled during high-pressure times will be a plus."
Lay your cards on the table
An anonymous manager faced a similar dilemma at his own company, and shares this story: "I invited all my direct reports into the conference room and told them up front that I was under orders to lay off two in our unit. It was important that their responses back to me were private, so I requested a written response on why they should stay or go. Knowing that I could choose anyone to let go made their responses more impassioned and real. I found out that several ‘saw this coming' and were already deep into the job-search process. This made my decision easier. We gathered again for the announcement of whom I would let go, but I never disclosed what the reasons were for the decision."
Open communication is top-of-mind for an anonymous San Diego manager, who advises being up front with employees. "Tell them they are all good workers and you don't want any of them to go, but your orders are to lay off two of them, through no fault of their own, just the economy. Ask if anyone has other options he or she wants to exercise, like early retirement, or maybe someone hasn't told you about planning a move. It will remain gut-wrenching, but that's why they pay you ‘the big bucks.'"
Look for alternatives
In tough economic times, laying off good workers can be an emotional burden. One anonymous A/P director suggests this approach: "Try looking at other ways to save costs and jobs -- across-the-board pay cuts for all team members, unpaid leave, taking saved up vacation time or telecommuting. Many employees are willing to do these things, especially since they are good employees. They'll be willing to sacrifice to keep their job off the chopping block."
"Two of five is 40 percent of the workforce," says another manager. "First see if the person giving the orders would go for cutting everyone's hours and pay by 40 percent as an alternative to letting two of them go. Or, see if some workers are willing to go to part-time status until the business turns around."
A final note
At a time when being "laid off" has almost become the norm, if your business is going poorly, you likely won't surprise anyone. Don't allow your emotions to let this drag on longer than it needs to. As one A/P manager puts it, "There's nothing worse than a bunch of employees walking on eggshells, worried about what's to come and not able to do their work. Make your decision quickly, give the news with compassion and get on with the business of keeping your department performing at its peak."
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