How employers can soften the blow of furloughs and layoffs

Furloughs and layoffs are traumatic — especially during a pandemic —but new research from Rice University offers ways employers can ease the emotional impact when they deliver the bad news to their workers.

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“Softening the blow: Incorporating employee perceptions of justice into best practices for layoffs during the COVID-19 pandemic” suggests behavior-based policies leaders can apply when implementing furloughs or layoffs. Co-authors Isabel Bilotta, Shannon Cheng, Linnea Ng, Abby Corrington, Ivy Watson, Eden King and Mikki Hebl drew on previous research about perceptions of fairness to develop the recommendations.

The research indicates employees’ reactions to layoffs are affected by their perceptions of fairness. Organizations can significantly reduce the emotional effects layoffs have on their employees, the researchers found, if they announce staff cutbacks in a transparent and sensible way and show concern for their workers’ dignity and well-being.

Before employees are laid off, the researchers recommend organizations do the following:

  • Explore all other options and make sure employees know you’re doing that.
  • Ask employees for ideas about how to cut costs.
  • Be as transparent as possible if layoffs may lie ahead and give employees time to process the news.
  • Before layoff conversations begin, decide who will deliver the news and when it will be delivered. It is best for the news to come privately from a direct supervisor.
  • Be clear on what information will be communicated to employees and how much detail will be shared so that they will receive consistent messaging. Be prepared to answer questions about paychecks, benefits and severance.
  • Before layoff conversations happen, leadership should send an organizationwide message to bring all employees up to speed.

Amid layoffs, the researchers recommend: 

  • Those delivering the news should give layoff conversations their full attention.
  • Be clear and concise when explaining the decision and next steps.
  • Acknowledge the difficulty of being laid off and possibly not being able to say goodbye to colleagues in person. Those delivering layoff news should convey that they and the organization are grateful for the employee’s work and contributions and still care for the laid-off worker. Give employees an opportunity to respond and ask questions.
  • Ensure that laid-off employees are provided support and resources, such as severance pay and outplacement

After the layoffs, the researchers suggest checking in with remaining employees, either in groups or one-on-one. They also recommend providing updates to demonstrate compassion.

The research paper is online at https://bit.ly/2RuXCCA.

About Amy McCaig

Amy is a senior media relations specialist in Rice University's Office of Public Affairs.