How to Manage Company Reputation during a Layoff
It may come off as an insensitive consideration during a layoff, but it is imperative to manage employer reputation as best as possible, especially for its impact on remaining and future employees. According to Edelman’s 2023 Trust Barometer, 89% of respondents rated job loss as their top personal economic concern, up 4% from the previous year and 15% higher than the often reported ‘inflationary pressures’.
While there will be some degree of an impact for any layoff—a dip in employee morale, an onslaught of emotionally-charged employer reviews, and a relentless line of media questions—there are actions to take which can reduce negativity and help maintain a positive image.
- Clearly Communicate
We’ve touched on this in previous articles in this series, but clear communication is critical. What exactly does that mean? It means being consistent and specific throughout the process. For instance, if one company spokesperson is purely blaming uncontrollable economic conditions while another is blaming those same conditions plus a change in new leadership’s priorities, red flags are raised. And if new leadership’s priorities are not detailed, more red flags are raised. A consistent and specific line goes a long way towards justifying a layoff and establishing respect. “This is due to an unfortunate combination of reduced consumer spending, plus a strategic shift in priorities from consumer products to business services.”
- Positively Communicate
Piggyback on clear communication with positivity. Naturally, layoffs create plenty of negativity. And while no dose of positivity will completely subdue that negativity, it can offset some of it. It’s best to acknowledge the layoff, express the reasons, then shift the conversation to the future. Let’s take the same quote from above and expand on it with some forward-leaning promise. “This is due to an unfortunate combination of reduced consumer spending, plus a strategic shift in priorities from consumer products to business services… While this is clearly a difficult time, we’re confident that this is best for the longevity of our business and our many current and future employees."
- Support Former Employees Find a New Direction
To maintain a respectable reputation, it’s mandatory to support those who’ve been laid off. Support often comes in two forms: outplacement services and severance. A severance package is fairly simple, generally consisting of continued pay based on pre-layoff hourly pay rate or salary and tenure; One to two weeks of pay and certain benefits per year of employment is the current standard. This is to help ease the financial burden while individuals transition out.
Outplacement services are more complex, coming in various forms. Typically, they consist of some degree of individualized coaching services designed to ensure laid-off individuals have the mindset, marketability, and connections they need to land a fitting job. By demonstrating their commitment to supporting employees progress their ongoing career path, organizations maintain trust and credibility with employees and consumers.
- Reassure Remaining Employees
If employees ever need reassurance, it’s clearly during a layoff. There are several ways to do this. First, collectively communicate the reason for the layoff to them as clearly as you communicated it externally. Second, map out a path, so that they understand there’s a strategic move forward. Third, have managers and directors meet with their direct reports, candidly and individually, reassuring them that they’re there for a reason. This is also a time when you can discuss their personal path. What’s next for them in their career? Where do they want to go? Last, but not least, let them speak. If they need to express concern for their former colleagues, let them. If they need to vent, let them. This is a time when they may feel compelled to communicate more than ever, and they deserve that.
- Lessen Future Blows
With so many internal and external factors acting as triggers for layoffs, this is easier said than done. If we could all play Nostradamus and predict every layoff, we would, and we would do whatever it takes to prevent it. Having said that, there are preventative measures to take. If we look at some of the internal factors that have historically plagued companies and forced layoffs, we see acquisitions, cost-cutting, outsourcing, and over hiring, among others. When companies make bold strategic moves to cut or invest or reposition, it’s not as if leadership fails to consider their workforce or reputation, blinded by financial projections. But perhaps it’s time for a paradigm shift—time to put their workforce and reputation at or near the top of the consideration list. “If we do this, what will it mean—what could it mean—for our people and our reputation. What are the potential ramifications?”
Layoffs are a critical moment for an employer’s reputation. However, if organizations openly communicate about the issues they are facing and the business rationale for the changes, when the time comes for layoffs, people will respect that honesty. This will also boost commitment, retention and attraction as your brand will be seen in a positive light. Those impacted will remember that despite the hardship they were treated right and shown respect. They were listened to and helped to find a new role. That will speak volumes about your organization and ensure that current and future employees will continue to want to work for you.
To learn more about how LHH supports organizations protect their employer brand during layoffs, please get in touch.