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Great Workplaces Avoid Layoffs

Great Workplaces Avoid Layoffs

IN THE NEWS: See Kevin Kennemer, The People Group, appear in this news story covered by Tulsa’s NewsOn6 about a business owner who avoided layoffs.

When meeting with CEO’s, business owners and leaders, it is in their company’s best interest to understand missing employeesthe advantages of adopting, modeling and promoting a Great Workplace Initiative.  The company wins. The employees win.  Our society wins. Great Workplaces are also better able to avoid the scourge of U.S. corporations – the dreaded layoff.

When times get tough, Great Workplaces are better prepared for difficult business conditions.  According to a recent ground-breaking study, Great Workplaces perform layoffs at half the rate of their average-performing counterparts.  This means job applicants should be searching for companies recognized as Great Workplaces. Below are some observations about layoffs:

  • Layoffs should be the last resort, not a knee-jerk reaction to please shareholders.
  • A CEO who knows and cares for employees will first attempt cost-cutting measures and involve the entire workforce.
  • The goal of drastic payroll reduction is to quickly raise the stock price.*
  • Downsizing raises the perceived value of the firm but lowers the actual value.*
  • A leader who has to look employees in the eyes has motivation to pursue alternatives to layoffs.
  • Companies who avoid layoffs are better prepared to meet customer demand when the economy turns around.

Before you call HR and ask them to cut 10% of your workforce, consider these other cost-cutting strategies adapted from our friends at the Great Place to Work Institute:**

  • Involve people to develop strategies. This provides people a sense of control in a difficult situation.  Losing a sense of control in difficult situations can send employees into a tail spin and all their energies will be spent ruminating about the dangers and unknowns ahead rather than the business at hand.
  • Share information. Leaders should not run and hide in the board room.  If the leaders are not out front communicating, employees will create answers to their own questions and this information will spread like wildfire via the company grapevine.  And certainly do not force the employees to read news about their very own company in the media.  Leaders are better off sharing information and often.
  • Show up, be available and say thank you. Get out of the office and walk around the workplace and visit employees. Listening is a great skill, especially during tough times.  Answer the questions you have answers for and obtain answers for those you don’t.  Be sure to say “thank you” to your employees.
  • Start cost cutting with yourself. Leaders should lead by example and that means cutting their own salaries and benefits if that’s what is needed.  Don’t ask employees to do something you are unwilling to do yourself.  Suspend bonus payments for employees and executives.  This will send the message this is a team effort.

What are other alternatives to layoffs?

  • Voluntary retirements.
  • Allow normal attrition to slim down workforce.
  • Reduction in hours for non-exempt employees and pay reductions for exempt employees.
  • Offer unpaid leave. There could be employees who would like some time-off to handle some personal matters, further their education, etc.
  • Offer reduced-salary sabbaticals with benefits.
  • Impose a hiring freeze.
  • Quickly work with under-performing employees. If they do not improve, respectfully part ways. Don’t wait until the economy turns south and disguise the separation as a layoff due to economic reasons because survival anxiety symptoms may surface in the remaining employees.
  • Cancel business travel, especially with the current accessibility of video conferencing.
  • Suspend 401(k) contributions.  But if you do this, make sure the executive retirement plan contributions are suspended too.
  • Finally, rid your company of bullies and jerks.  Bullies impair productivity and raise health care costs and paid time off requests.

Great Workplaces outperform their competition, attract and retain the best talent, enjoy greater cooperation among team members, experience high levels of customer satisfaction and employee innovation, plus a number of other wonderful benefits.  It is never too late to start your Great Workplace Initiative.

* Excerpt from Corporate Violence by Dr. Howard Stein citing Jonathan Lurie 1998.  My thanks to Dr. Howard Stein for his friendship and brilliant mind and writing.

** Adapted from Maintaining Trust in Difficult Times” by Amy Lyman, Co-Founder & Director Corporate Research, Great Place to Work Institute.

Kevin Kennemer is founder of The People Group based in Tulsa, Oklahoma. Kevin is driven by his passion for company owners and their need to earn a profit, employees' desire for a positive and fulfilling work experience, and the community that benefits when both groups do well.


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