Is there a right way to lay someone off?
By
At the Maximum Impact Simulcast on May 8, I fielded a very timely question.
During lunch, a young man asked,
“How does a good leader handle layoffs? Especially when they need to lay off a good and valued employee?”
Here’s what I believe:
First, I don’t think a leader should ask others to make sacrifices until he’s made some himself. So I’d examine other company expenses to see what could be sacrificed instead. So many executives, when faced with the need to cut costs, will sacrifice employees ahead of their own corporate perks. Instead of looking at the big picture, they see only their OWN picture.
But if an organization is only as strong as its weakest link, then leaders should do everything they can to avoid removing a STRONG link. A good employee is simply too valuable to let go without exhausting other options.
I do the same when hiring. I’ve always believed that if you find a good potential employee, you do whatever you can to get them on the team – even if it means creating a position or changing the budget. I once even gave up my own budgeted salary for a year in order to hire the leader I wanted to run one of my companies.
You may not be able to sacrifice your salary to keep an employee, but if they’re truly valuable, you certainly should be willing to give up the box seats at the baseball stadium, or use of the corporate jet, or your company-paid gym membership.
And after all the budget-busting, if you still need to lay good people off, then make it your goal to help them find a new position. Tell them you will be their #1 advocate. Offer to be a reference in their job hunt. Network on their behalf. Write the recommendation letter and/or make the phone call to the potential employer. Do whatever you can to ease their transition.
Finally, ask if you can remain friends even if they can no longer be on your staff. Who knows what the future may bring? Besides, as a leader, your goal should be to add value to the people you lead. When good employees leave and take a new position, it might offer them better opportunities than what you could have provided.
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Thanks for a wonderful comment on what’s going on right now. I so appreciate your insight on matters of Leadership. It’s tough to be a truly moral and ethical leader and there aren’t enough of them out there.
John, very appropriate for our times. With the economy tanking, we still have to treat people with mutual respect and kindness. Thanks for sharing your wisdom on this subject!
Good points all – our company prohibits us from allowing employees we lay off to use us for references. They have been sued too many times – the lawyer gets the manager on the stand and holds up the reference letter and says “if so and so was such a good employee why did you lay them off? ”
But your points about cutting costs other ways first are so true John. Layoffs are in my opinion a way for incompetent leaders to take the easy way out to make numbers. “Why should I have to really figure out how to run the business when I can just cut 5 heads and make my numbers that way?” That’s the unfortunate mentality out there.
Outstanding article. Right on the money.
100% dead on! Great article!
I appreciate a great deal that you suggested looking at the excess “fat” before cutting out the “meat”. There are so many employers who simply will not give up luxury that has become rote to them, and as you say, balance a failing budget by letting staff go. The dichotomy here is that I personally have never seen a company continue to succeed when they sacrifice the heart of the company (the people) for the frills.
John,
Outstanding article… I was forced into this precarious position several years ago when I was told I had to let 95% of my organization go… It meant that about 20 people would be losing their jobs.
Thankfully in speaking with other departments in the organization who were hiring, I was able to place everyone who wanted to stay with the company onto another team and only 2 actually left the company.
If a leader has this option, they should absolutely do this, especially if the employee is worthy of staying with the company. All to often however, managers get forced into this predicament because they don’t provide honest and accurate feedback to under performing employees. They allow them to sit in the bottom of the barrel causing a waste on financial resources you could use to keep the better employees.
This is so true in today’s economy. Trim down the excess from the top down. Cut out some executive perks first. Then let some middle management people begin doing things not really in their portfolio. Make sure anyone you layoff is done so with intergrity.
John,
This exact situation happened to me and, to the credit of my former boss, he did almost all of what you said in this article. The exciting part is the position I was able to secure a much better position I had at my former company. I believe this is primarily how my boss handled the situation with me and the fact that his attitude allowed me to accept his decision and look for a better opportunity. But make no mistake about it, my boss set the tone and you article seemed to be his roadmap. Great topic in our current times. Thanks John
John you are a true leader =).
you are the last person to be giving advice on this subject SORRY
Thanks John. That is really great advice and would really help the person being layed off land a bit more softly.
I had a great manager when I worked for Waldenbooks. The company wasn’t “laying off” people, but they were cutting the number of payroll hours the store could use – so that effectively meant the same thing.
Our manager, Tom Hedges, called us all together for a meeting and told us that our choice was that one person could be without any work hours for a time, or we could ALL cut back so one person wouldn’t have to take such a hit. Of course, we all voted to cut back a little rather than one person suffer. We were all in it together, a team, so we all felt that we had made a contribution and were appreciative of each other.
Tom turned a bad situation into a team building situation.
Very appropriate advice. Very good, John. Thank you.
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This must be read from the rooftops in these times. I wish that everybody would have such integrity like you, John! You really make difference in world!
Great. this is quit applicable in my country… especially to the banks.
I once had a leader that did everything he could to help me land a better position. He made contacts and was my biggest supporter. I will always be grateful.
I know when I have had to let others go, it has caused much angst. Not a comfortable place to be, but one that probably sharpens us.
We were forced to downsize.
It reveals the character of your former employees. One tried to bilk us out of thousands. Another came in to work every day even though we told him again and again that we could not pay him. Guess who we hired back as soon as possible?
What makes John great is that he actually walks the walk. John is #1
I totally agree with you. One key factor in hiring is teamwork-ability, and even employers need to cultivate it. Then, it’s easier to make sacrifices for the other. It seems like one person is sold to maintain s.th less valuable but perceived as important.
Shared Sacrifice is an excellent approach…It’s a novel approach but Compassion, Mercy and Benevolence in practice is where we need to be – doing all the good one can, for as many as one can, for as long as one can (paraphrase of John Wesley)…
Outstanding article from an outstanding leader! My wish is for more leaders such as you.
John: Very powerful suggestions. I recall a company where people would be routinely laid off when the budget became tight. The same manager would later complain about the trouble of hiring and training when money was flowing and work burgeoning!
Peope are not “a” resource, people are *THE* resource.
Great article. Most individuals that are having to make the decision whether to lay off someone or not dont really put some of these into consideration. Thanks for the insight.
John,
Thank you for your insight. I fully agree and pray that others reading will truly apply the suggestions you have given!
I was laid off in February from my 20.5 yr. public service govermental position. Unfortunately, when it comes to county goverment – they seem to be the last ones to seek to impliment these kind of solutions.
What would you recommend for those having to re-invent themselves after a 20 year tenure in the same position?
I am a single ‘non-’working mother with a seven year old autistic son.
Sincerely,
‘Your friend’
Member @ CF/Royal Palm
This is the quality of a good leader that every rich dad may have to know…
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Loved this message, my favorite was ask if you can become friends after they leave. It is so true that maybe there new company can offer a better opportunity than what you could provide. A new postition could be that blessing you where looking for..
All the best this weekend, something God provides the finest resource while reading between the lines of His love. Who knows it might have been written just for you. We serve a great God..
I have found that sometimes people in leadership positions think they are great leaders simply because they have achieved the position. I think they only become great leaders when they face inevitable adversity such as this particular situation where their character is truly tested. I also believe being honest to the individuals who are being relieved of their jobs is important and more appreciated. I love that you are encouraging leaders to become more selfless!