Layoffs in Age of Coronavirus: Delivering News That Will Make People Hate You
By Thom Fladung/Hennes Communications
The numbers are grim and grow more discouraging by the day. Tens of thousands of people are losing their jobs as businesses re-evaluate, retrench and dig in to adjust to a nationwide coronavirus shutdown.
Companies and organizations from General Electric to the National Rifle Association to your favorite restaurant down the street are letting employees go.
The Plain Dealer in Cleveland reported that jobless claims in Ohio increased 2,800% in a one-week period, spiking higher than any weekly filings in three decades, including the Great Recession of 2007 to 2009. The numbers are so grim Ohio announced it would stop releasing daily unemployment claim statistics, at the Trump Administration’s request, as cleveland.com reported.
Behind every number is a person who needs to deliver the bad news, and an employee whose livelihood depends on a paycheck.
Telling employees they’ve lost their jobs is one of the most unpleasant, thankless tasks a business leader takes on. It’s also one of the most important. How you deliver the bad news will help determine how your business goes forward and how the employees who remain will regard the company and their jobs. Also, as is often the case with communicating during a crisis, these most difficult moments determine how you’ll be remembered and regarded for years to come. As an instructive Harvard Business Review story noted, “All of your employees and customers are going to be watching how you handle the process.”
My years as an editor and managing editor at newspapers dovetailed with the industry’s financial crash. I bought out, furloughed and laid off more accomplished and dedicated journalists than I like to remember.
Whenever possible, I wanted to do it myself, in face-to-face meetings with each employee. Whether it was the first such meeting of the day or the 12th, I took a deep breath and reminded myself that each one was the most important meeting I would have that day – because it was to the person I was meeting.
And I quickly learned that there is never a good time to deliver this news.
Now, of course, is an extraordinarily bad time, with frightened people living through a pandemic, unmoored from their normal lives and with health care concerns at the forefront – with about half of Americans getting their health insurance through their employers.
All the more reason to study best practices of crisis communications and the most humane, empathetic approaches to a harsh exercise:
- Plan and train for it. The Harvard Business Review notes that such training is rare. Organizations would rather not think about laying people off, much less spend time and money to train for it. An alternative may be to seek out a mentor or someone you trust who has hands-on experience at it.
- Be compassionate but also be direct. Deliver the bad news upfront. Don’t attempt small talk. Be firm as you’re being kind. Make clear that the decision has been made.
- Go in armed with information. Have the severance details prepared in a package to give to your employee. Offer to go over it but also offer time later, after the employee has reviewed it at length, to discuss details or questions with your human resources representative or outplacement firm.
- Don’t deny the obvious. The timing is terrible. A new job will be hard to find. If you’re willing to write a reference letter, offer to do so. If you’re offering outplacement help, remind the employee of that. Give the person an opportunity to vent – but direct the conversation back to the fact that the decision has been made.
- Be prepared for anger and, possibly, tears. Have a box of tissue handy. But don’t get caught up in an argument or debate. It should not be a lengthy meeting. In most cases, the employee will want to get out of that room – and get away from you.
- And at all costs, don’t confess how this isn’t easy for you or the company. It’s not easy – but it’s easier than being the person on the other side of the table.
Trends: Extending health care, sharing the pain
Research into how companies are handling this right now, based on public statements, press releases and news stories, revealed some trends that may help you determine the best approach for your organization.
Easing the health care fears. With health care top of mind, many companies, like Hertz rental car, are requiring unpaid furlough or deeply cutting pay – but maintaining health care benefits. Luxembourg-based steel pipe manufacturer Tenaris is laying off a combined 900 employees across multiple U.S. sites while offering all affected employees three months of COBRA health insurance. Oglebay Resort in West Virginia is furloughing 58 full-time employees and paying employees’ share of health insurance premiums for April and May – but employees are expected to pay that back through payroll deduction upon return to work.
Employers also should be schooling themselves on health care options to help soon-to-be ex-employees – such as 11 states and the District of Columbia opening enrollment under the Affordable Care Act to allow laid-off workers to get subsidized health insurance.
Sharing the pain. Steelcase Inc., the Michigan-based office furniture maker, is temporarily laying off nearly all of its manufacturing and distribution employees and also cut all salaried employees’ base pay by 50 percent, cut executive base pay by 60 percent and cut President and CEO Jim Kean’s base pay to $1. Steelcase said it will continue to pay the full cost of employee health insurance premiums during the shutdown.
Signet Jewelers Ltd., the Akron, Ohio-based jewelry retailer has shut down brick-and-mortar stores, putting thousands of people out of work. Those store employees will receive pay and benefits at least through April 4. Signet also said it will be reducing work hours and using furloughs for other employees, including executives.
Making the extra effort: Buehler’s Fresh Foods, an employee-owned chain of 13 grocery stores across Northeast Ohio, is giving employees more than $250,000 in “appreciation pay” for working during the pandemic and has committed to retain the 227 employees who worked in the store restaurants that are closed during the crisis.
Tessy Plastics, in the Finger Lakes region of New York, is laying off 400 people – but also is spending $2 million to give each of its 1,000 employees $2,000. “So many of the people and including people working here that live paycheck to paycheck are really uneasy and frightened with unemployment not paying much and them potentially having to get laid off,” Tessy President and owner Roland Beck told a local television news outlet. “A lot of the employees just didn’t want to be here, but they can’t afford not to work. So, I wanted to give them an option to not be here.”
Finally, the layoff process will take an emotional toll. Laurence J. Stybel, a career management and board adviser, said in the Harvard Business Review story: “Once you’ve delivered the news, find a way to physically and psychologically restore yourself. Whatever you do, don’t schedule another meeting right after – give yourself time to calm down.”
Again, it won’t be the toll visited upon the people who lost jobs. But the business leaders executing the layoffs need to also care for themselves. Now, more than ever, you need to be an effective leader for the employees who remain.
Thom Fladung is managing partner at Hennes Communications. Check out Hennes at www.crisiscommunications.com. Thom can be reached at 216-213-5196 or fladung@crisiscommunications.com