Companies are under pressure to cut staff, but experts warn they need to make decisions carefully to keep the company successful down the road.  HR is in a good position to help decision makers step back and see the big picture and consider the long-term impact layoffs can have.

No companies want to lay people off, but these days there are few options. Almost 60% of employers say they’ll reduce staff this year, according to a recent PBP Media survey.

Despite the cost-savings, they’ll likely face a host of new challenges — experts warn organizations to consider the hidden costs of layoffs. For example, those who are left behind may be less productive and make more mistakes.

That’s not to mention all the tricky legal issues.

To keep those problems at bay, here are some of the mistakes organization can avoid during the decision making process:

1. Fail to consider alternatives – Some organizations have found they can save enough money by cutting hours, freezing salaries and hiring, or just getting rid of a few non-performers. All options should be considered before determining what’s appropriate.
2. Lose the wrong people – During restructuring, it’s imperative to hang on to top performers, high-potential employees and future leaders. Managers need to identity who they are and keep them on board — those are people companies can’t do without, no matter what the economic climate.
3. Don’t communicate transparently – Many companies hold off on giving employees any news until they have an exact picture of what the future will bring. But remaining silent during tough times only makes it harder to manage layoff survivors. One strategy: Hold regular meetings and let staff ask questions. Even if there are no answers yet, employees will at least feel like the company’s listening.
   
4. Use the wrong words – Managers often sugarcoat bad news by using euphemisms instead of saying what they really mean. But so everyone is on the same page, all company communication should use the proper terminology: “Furlough” refers to a temporary unpaid vacation or a reduction in employees’ hours. “Layoff” implies eliminated staffers will be called back once business picks up again. Permanent staff cuts are generally referred to as a “reduction in force.”
5. Think top employees will stay just because of the economy – Even as companies are cutting staff, they can’t forget about their retention efforts. Despite the rough market, nearly 20% of employees plan to look for a new job this year, according to a CareerBuilder survey. That number’s likely higher for employees who have survived cutbacks.
6. Forget all applicable regs – The federal WARN gives firms guidelines on handling layoffs, but many states and localities have even harsher restrictions. Make sure all managers and execs have a clear picture of what’s on the books in your area.
7. Neglect to guide first-level managers – When managers decide who stays and goes, some may take the chance to get rid of employees for unlawful reasons. That’s why supervisors need plenty of guidance from the top and sufficient review of their decisions.

Tags: communication, downsizing, layoffs, staff cuts