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How to Lay People Off, the Right Way

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There’s a fine line between investing in the growth of your business and bootstrapping to save money. This is something that all startups and small businesses face at some point.

Whether it’s repercussions from the recession, changes in the market or a branding revamp, a lot of business experience growing pains. How do you deal with them successfully?

What happens when you hire too fast, or need to make a significant pivot in the direction of your company, and need to lay off employees? Below are the right steps to take when laying people off, so you don’t burn bridges.

Step 1: Find the Right Perspective

As much as you love your employees, and respect the amount of time and energy they’ve poured into the company, laying them off is simply something that’s best for everyone. Remember that it’s just business.

If you’re unable to continue down this same path, you won’t be able to give your employees the best, and they in turn, won’t be able to produce the results you want. It’s better for everyone if you understand the reason behind the decision and focus on the fact that it’s just a business move.

Show the compassion you have for your employees and do what you can to help them make a smooth transition. But remember they are adults and will likely understand that it’s not something to be taken personally.

Step 2: Give a Warning

If at all possible, give your employees a warning a few months in advance of the actual layoff time. Let them know you’re cutting back expenses all around, curbing your personal spending, and doing everything you can to make the layoff seem like part of the process.

You don’t want your employees to feel blind-sided or confused by your priorities if you’re spending like crazy, but then laying them off. Let your actions show that your budget direction is changing, and make them aware of the fact that restructuring is inevitable.

Doing a bit of prep work in advance, will help the news of being laid off go over a bit smoother, while giving them plenty of time to find another job.

Step 3: Consider the Timing

Timing is probably one of the most important factors when laying off any employee. Don’t break the news to your team on Friday before they’re heading home for the weekend. Their weekend and yours will likely be full of phone calls and angry emails.

Be sure to keep your points short and sweet. Don’t gather everyone up for a 90-minute staff meeting that details why your business can no longer employ them. Make it a casual affair, maybe with coffee and refreshments, and deliver the news on a Tuesday.

Find a balance between letting them go for the sake of the business, and showing your compassion for a fellow human being.

Step 4: Deliver the News in Person

You also don’t to tell your employees the bad news over an email. You want to portray yourself as an understanding boss, but someone who’s thinking of the bottom line, and an impersonal email is not the right approach.

Deliver the news that they’re being laid off in person -- or over the phone if you can’t do it in person. The point is to be present in the business decisions, and not hide behind a computer.

If you truly believe this is the best direction for the business, and will ensure it’s continued success, then you must stand behind the layoff initiative. Your employees will respect your decision, and you, for delivering this kind of news in a face-to-face manner.

Step 5: Provide Support

Hopefully, you’ve created an environment where your employees come to you with any career questions or situations they’re facing. Now would be a great time to provide your support and help them bridge the gap between this job and their next one.

Maybe you know a contact who’s looking for the exact skills your employees have. Or you could enable access to career counseling for a certain number of months after the layoff.

Hold a short seminar on the power of LinkedIn, or a resume building class, to help your employees dust off their abilities to get rehired.

Going the extra mile for your employees will enforce the type of work environment that’s primed for success. And just because you can’t hire everyone right now, doesn’t mean you won’t be able to hire them again. Don’t burn those bridges!

Use these steps to ease the news of laying off your employees and find ways to balance being the boss, with being an understanding person.

About Carrie Smith

Carrie Smith is a money maverick and financial blogger who helps creative freelancers discover the art of making a living. In May 2013 she quit her full-time accounting job to start her blog, Careful Cents.

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