Forbes Article by Forbes Council Member, Maryanne Piña
When I was a kid, I remember my father coming home late in the evening acting differently than usual: His face was full of worry and despair. Mom was holding his hand and rubbing his back, telling him that it was going to be okay. He had been laid off with no severance package, no outplacement services. This occurred every 18 to 24 months; my father worked construction, and as the projects ended, so would his employment.
Our experience was not unique: The vast majority of families in our Rio Grande Valley, Texas, community experienced periodic to regular unemployment. About all of us were immigrants from Mexico and Latin America, striving for a better life and the American dream. However, most families in our community were living paycheck to paycheck, and layoffs with no job transition support put the whole family, and community, into significant stress.
Layoffs Adversely Impact Minorities And Minority Communities
The majority of people impacted by a layoff are in front-line positions, even now. Reduction-in-force (RIF) actions in the pandemic years impacted the front-line employees and supervisors, resulting in a disproportionate impact on underrepresented groups. From call center associates and hospitality staff to manufacturing employees and home builders, those who do the work are often the ones who are laid off in greater numbers, with limited severance and no job transition or outplacement support. I have seen companies that express their commitment to their employees—and to diversity, equity and inclusion (DEI)—lay off hundreds, even thousands, of employees and have a disproportionate impact on vulnerable minority families and communities.
Inclusion And Business Imperative
An unfortunate reality is that market forces, organization performance and strategic changes (i.e., mergers) often result in layoffs. However, how a company manages a layoff matters! The actions they take are a litmus test of their values and level of commitment to their people and DEI. When layoffs are managed without support, it’s no surprise to see a decrease of employees’ positive perceptions about their employers.
For example, a blind survey of Snap employees found that prior to their cycle of layoffs, 75% to 85% of employees said they would recommend working at Snap. However, after laying off 1,000 employees, only 30% of employees would recommend working at Snap, largely due to the lack of support that former and current Snap employees felt they received in their job transition. When a reduction in force is managed badly, the direct and indirect costs to employee engagement and company reputation can weaken performance for years to come. And with online forums like Glassdoor, employees at all levels can be heard, strengthening or weakening your organization based on how they believe they are treated on the way out the door.
If your company must manage a reduction in force, whether it’s one or 1,000 employees, here are three ways you can be supportive of your exiting employees while maintaining strong DEI standards.
1. Be value-driven.
For organizational leaders, company values are inherently important; these values drive company culture through unforeseeable challenges, and they influence behaviors that support decision-making and address issues effectively. Unfortunately, it’s not uncommon to see layoffs conducted without company value alignment. Instead, we should follow the example of leaders like Brian Chesky, CEO of Airbnb, whose letter to all employees set a proper tone for necessary layoffs by demonstrating sincerity, empathy and transparency.
2. Be inclusive.
Unfortunately, the current mass layoffs are reversing some companies’ DEI efforts. For example, big tech layoffs are hitting women and Latino workers the most. According to data from Revelio Labs Inc., “women and Latino workers represent 46.64% and 11.49%, respectively, of the tech layoffs from September to December 2022, while those segments make up 39.09% and 9.96%, respectively, of the entire industry.”
Layoffs can impact performance, culture, and diversity and equity efforts for years to come, so moving to comprehensive outplacement should be done with an inclusive lens. Reductions in force matter just as much as attracting and retaining talent, and organizations that don’t blindly focus on cost reduction at the expense of inclusion will reassure stakeholders of their commitment to DEI.
3. Be Communicative
Effective communication is the bridge between confusion and clarity and is critical to any layoff. Prepare to address tough questions, remarks and emotional reactions. Gain respect through transparent conversations. For instance, Salesforce pledged 90 days of no layoffs, and when the time came to conduct an RIF, their exiting employees understood the reason and were appreciative of the severance benefits. Another great example is Discover’s CEO, Roger Hochschild, who in 2020 communicated openly (registration required) that white-collar jobs were at risk.
Diverse employees who are laid off often have fewer resources available (subscription required) to financially survive a layoff and have a less robust professional network and support system they can rely on. They need outplacement support but often don’t receive it. Diverse employees also have differing situations—for example, many Latino employees reside with extended families, and it is less feasible for them to move for a new job. They need support that is sensitive to their personal situation and “cultural script.”
Employers who provide meaningful outplacement support to people impacted by a reduction in force are fostering a positive employer brand while reducing litigation risk. And, most importantly, employers are doing the right thing for the most vulnerable and negatively impacted by a layoff. Trust me, the survivors will notice, and what they see will help mitigate the engagement and retention impact of a reduction in force, as well.
As seen in Forbes.