Home for the holidays takes on a whole new, depressing meaning when businesses layoff employees during December.
Losing your livelihood during the “happiest time of the year” is pretty awful for employees, so why would a company be so Scrooge-like?
We asked several HR professionals to weigh in on whether or not it’s acceptable, or advisable, to conduct layoffs during the holiday season, and if so, how to do it compassionately. They had a lot to say.
The vast majority of organizations run on a calendar year budget, explains Steve Spires, a managing director of outplacement solutions with BPI group, and year-end coincides with the need to achieve year-end numbers. “Business cycles are agnostic, and focused on results without bias, emotion, nor sentimentality,” says Jason Hanold, managing partner at executive search firm Hanold Associates.
Because companies may want to go into the next year with a fresh start, explains Mary Ellen Stayter, a career expert for Monster.com, being leaner can mean cutting costs by laying off employees.
“Even if their fiscal year ends in June, there is a psychological component to the end of one calendar year and the beginning of another,” says business psychologist Karissa Thacker.
Some of our HR experts agree that it’s better to hold off on downsizing if a few more weeks of salary won’t affect the bottom line too much. Layoffs during the holidays can actually do more harm than good for various reasons:
Layoffs Aren’t Always The Answer
Peter Cappelli, director of Wharton’s Center for Human Resources, says that there is no evidence that layoffs in general actually help the financial performance of companies other than when there are recessions or there is really not enough work to do. He believes that employees are only likely to accept layoffs as a reasonable response if a company is truly crashing. “If it is simply to try to improve financial performance, (people) aren’t as likely to accept (layoffs), and of course, they won’t work anyway,” he says.
Layoffs can have perceivable negative effects on morale, Cappelli explains. Not only do remaining employees feel bad for those laid off, but they are also likely to feel that they may be next.
“So they tend to freeze up, focus on the possibility of finding a job elsewhere, and they don’t get their own work done,” he says. “All that is likely to be worse during the holidays when they are more focused on their obligations to others because the costs of layoff seem bigger.”
People Are More Likely To Lash Out
Philippe Weiss, a managing director of Seyfarth Shaw at Work, has worked a great deal with unemployment matters and liability-prevention strategies. He says plaintiff lawyers have told him that they often see an uptick in calls from angry former company employees who are particularly incensed at the holiday-layoff timing.
“(Waiting until after the holidays) lessens the impact of the termination for employees who are looking for a reason to lash out with litigation, social media attacks, or acts of workplace violence,” says San Diego-based HR, training, and security consultant Steve Albrecht.
Albrecht believes that getting sued by an employee for wrongful termination is harder to defend to labor law juries when the layoffs happen on Christmas Eve. “Some compassion in the beginning can save expensive hard feelings later.”
There will always be some sort of holiday approaching says Jules Hill, vice president of operations at software startup CellBreaker. “It’s never going to be a convenient time to lay someone off, so if it needs to be done, do it right away,” he says.
Several experts agree that once a decision to conduct a staff reduction is made, it is often best to carry the plan out at that time, regardless of whether or not it falls within the holiday season. Here’s why:
People Often Know It’s Coming
Waiting for a long period of time before implementing the decision to lay off employees adds an element of risk for the business explains Spires. “Confidentiality can be compromised as news may leak, resulting in a negative impact to a broader workforce who then all begin stressing about rumored changes,” he says.
Psychologically, people struggle more with not knowing and wondering if it’s going to be them than they do after they know says Thacker. “After they know, they can begin to full out problem solve,” she says.
It Could Be In Employees’ Best Interests
Weiss recalls working with a company that was heading for a very difficult time due to some looming regulatory changes. The company knew the contraction was inevitable and had more cash in December, so they timed the layoffs accordingly. “The goal, there, was to make sure that those people who would be gone anyway were provided with appropriate severance packages,” he explains.
There is also a school of thought, Spires explains, that if a decision to eliminate positions is made, it’s kinder to convey the information up front. “An individual might make different holiday spending decisions . . . if they had information about an impending change in their employment situation.”
December Is A Good Time To Look For Jobs
There are several reasons December is a great time to be job hunting, including a smaller candidate pool and a rush to fill vacant positions before budgets are reallocated.
Weiss also worked with a company that accelerated its layoffs before the end of the year so employees could take advantage of the potentially short-lived uptick in the area’s job market.
Individuals who experience job elimination have a lasting memory of the way they were treated on the way out says Spires, so the attention an organization gives to the process truly matters.
“There is a fine line between an employee who is distraught at losing a job and one who is determined to wreak reputation havoc on social media,” explains Weiss. “That line is typically set and defined by how we treat those we are laying-off.”
If layoffs during the holidays are on the horizon, here is how to conduct them compassionately:
Do It In Person
The most compassionate way to conduct layoffs says Thacker is to meet with people in person. “In our connected world, it has become okay to lay people off by phone. That is just disrespectful. Managers should have the guts to look people in the eye.”
Spires suggests communicating the news during a private meeting with the impacted employee and their direct manager, often supported by a human resources representative. A hotline for benefit questions should also be offered.
“The message should be carefully worded and delivered humanely, not sounding like a script being read,” he says.
While Stayter says it’s important to be kind, it’s also vital you’re not overly friendly. “This does not hurt you as much as it hurts them,” she explains. “Be concise and don’t draw it out.”
Don’t Leave People Hanging
Apart from providing severance packages and information on continuing benefits, many experts agree companies can ease the transition for employees with outplacement services. This can include creating relationships with local companies through both in-house talent acquisition functions, executive search firms, and outsourcing firms to help employees network for their next job and career opportunity Hanold says.
Reassure The Remaining Team
Steve Anderson, CEO and founder of Legacy Publishing Company, laid off half of his workforce in November. To reassure his remaining team he provided an open letter to his company detailing the reasons for the layoff and where the company was headed.
“Letting go of staff is never easy, and it has a deep impact on the remaining team members–holiday or not,” Anderson says. “Just as much effort needs to go into communicating, reassuring, and motivating the remaining team to focus on and reach the new business goals.”
Don Kelly, vice president of human resources at Post University in Waterbury, Conn., stresses the importance of being clear that this layoff is the end of the action. “If people feel that layoffs may continue, the morale will quickly spiral down, especially at holiday time. Help people move forward, compassionately but firmly.”