One of the most difficult tasks for a small business owner or manager is preparing for employee layoffs. You must balance the needs of your business and the needs of the employees who are affected. This step-by-step guide can help you get through it.
Bring in a lawyer. Layoffs can lead to lawsuits, so you need all your documentation and your layoff process to be as fair and non-discriminatory as possible. A lawyer can help you set the guidelines and make sure you are following the law. A lawyer can also help you draw up documents. For example, severance pay is seen as a way to prevent lawsuits, and you may ask an employee to sign a release before he can receive the pay.
Understand how severance pay works. Severance pay varies depending on how long a person is with the company. A week to two weeks of salary for every week of employment is a rough guideline. Be consistent with your decision: If word gets around that some workers got different severance packages and it didn't have to do with how long they were with the company, you could be in trouble.
Look up their insurance options. COBRA law gives employees the option to pay to be on your company's health care plan for 18 months. If you offer a retirement plan to employees, let them know about their options.
Prepare to give references. You may want to work with the employee to determine exactly what you will say in your reference. Give employees your contact information so their potential new bosses will know whom to call.
Get what is yours. If your employees were using company cell phones or company laptops, make sure that all of these are returned.
Remaining employees may get emotional. These are people's careers and livelihoods. Be understanding, and let them get their say. Most will handle the layoff notice with dignity, but some may take it personally and say some things to you that are hard to take. They may say things about other employees who are staying. Do not try to explain your decision-making process, which can work against you once the employees pool their information (and they will). Simply state that your decision has been made and is final.
Don't forget about the employees who remain. How will their job duties change? Will they have more work to do now that several employees have left? Leave your office door open. Some will have tough questions for you. They will want to know about the state of the company and if they should brace for more layoffs. They may have survivor's guilt and will want to know why one person left instead of another.
When you lay people off, you need to prepare a game plan for how to redistribute the work. Don't just lay people off to save money and expect everyone who works for you to figure it out. Solicit ideas from them to see what can be done to ease the transition to a smaller staff.
 | Firing an employee so your company's protected and the employee retains some self-respect can be challenging. If you have a human resources department, solicit their involvement. If you don't and have questions or concerns about how to fire an employee, consult an attorney. |
 | As a small business owner, it is more likely that you have a closer relationship with your employees, which will make it even more painful if you begin layoffs. Prepare your words carefully, and try to be consistent. |
If you've ever had to say the words, "I'm sorry, but we're going to have to let you go," then you know how stressful termination can be for both boss and employer. No one likes to be the reason that someone else is out of a job, but business is business, as they say, and when a company suffers due to the negligence of one employee, that staff member must go. |&&|Disciplining and firing employees is one of the things that company presidents and CEO?s least enjoy about their jobs. |
It's essential to follow a few basic tips and advice when learning how to fire an employee, from how to handle employee layoffs to following proper company layoff etiquette. |
