Terry Corbell, The Biz Coach
By Terry Corbell
Business Consultant

Management: 7 Tips for Success if You Must Layoff Employees



Companies typically make two short-sighted errors in a business downturn. They slash the workforce and marketing investments. To the contrary, it’s important to place a maximum value on your human capital and avoid layoffs, and to expand marketing.

At the first sign of a business downturn – before laying-off workers – try these options:

But if it’s too late and profits are slim or none and you must lay off employees, be mindful of the impact on your organization’s culture and employee morale. By themselves, employee cutbacks won’t solve the long-term problems of your company.

Strategic planning is important, including:

1. Document your situation

Layoffs devastate the unemployed person and the people who are left behind. Workforce reductions can also hurt you and your company legally if they’re not documented properly.

Unfortunately, you can always face possible legal action in this litigious environment. So have a paper trail that shows you don’t discriminate and demonstrates layoffs are necessary to keep your business operating.

Take precautions to avoid the management lawsuit trap and EEOC discrimination suits in your business practices. 

Do your due diligence before terminating workers.

2. Communicate effectively

While financial woes or the idea of layoffs depress you, employees look to you for leadership. Communicate empathy in your layoffs to show your approach is humane.

For the remaining employees, make sure to take steps for strong team morale and to avoid employee burnout. Such employees aren’t happy about losing their friends and facing an increased workload.

Many feel underpaid. Know the right strategies if a valued employee wants a raise but you can’t afford it.

You’ll have to perform at a higher level – being mindful of their stress. Employees don’t want a boss with a negative attitude, such as “Be happy you still have a job.” They’ll quit you at the earliest opportunity. Be mindful of the employees who are most-likely to quit.

3. Evaluate operations and procedures

Listen to your employees – seek ideas – partner with your employees. Review your systems. Look for obstacles to success, and solutions.  

4. Prepare to invest

Your bleak situation is not permanent. Remember this axiom: “This, too, shall pass.” Take the long view because your finances will improve before you know it.

So constantly be mindful of marketplace and internal-company developments. Be prepared to act – to add your human capital – if the return on investment can be justified. You’ll know when the time is right to act.

Meantime, develop an image that will attract  the best workers.

5. Fine-tune your staff

Employee training should never end. Make sure there are no underperformers –weak links. Yes, such investments can be affordable or free – if you strategize. Avoid the typical 12 errors in evaluations.

Continually look for prospective employees. If you can hire a new employee or replace one, look for someone who represents an improvement for your organization.

6. Check how employees perceive you as a boss

What are your tendencies in stressful situations? Are you a motivator? Are you organized? Implement the right strategies to profit from employee respect.

7. Evaluate your culture

If your company is lacking in teamwork, morale is poor and profits are weak, chances are you need to change your organization’s culture. Be forewarned, changing a culture is a monumental chore because it will take strategic planning and super powers of persuasion.

Usually, it necessitates an outside participant to assess your culture. A cultural change may be necessary for profits.

From the Coach’s Corner, another thought:

15 Tips to Get Your Business Back on Track — Question: How is your year progressing? For many, the year isn’t faring well, and it’s obvious we’re still undergoing fundamental economic change.

Always bear in mind that your own resolution to succeed is more important than any one thing.”

-Abraham Lincoln


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.





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Seattle business consultant Terry Corbell provides high-performance management services and strategies.