20 Years Conducting Layoffs Has Taught Me 3 Things Great CEOs Do Right In Times of Crisis

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Dear fellow CEO,

Almost every one of our peers is in the midst of a business crisis absolutely nobody predicted.

No amount of financial modeling or business doomsday prepping could have made CEOs and their executive teams think their companies could be flipped completely upside down in a matter of weeks.

And yet, if you’re currently a CEO, you must own your actions right now.

The situation is a result of what you’ve done as a leader. I’m not suggesting you take the blame. You simply made decisions and took actions based on the information you had at the time.

But, fast forward to today, a huge curveball has been thrown. Taking ownership of the situation in order to move forward is your responsibility.

You became a CEO because of your desire to be in charge, a willingness to deal with conflict, and a capacity for doing difficult things.

Being a CEO isn't a job. It's not even a career. It's a calling. From one CEO to another, I get it. It's just something we feel born to do. This is why I am writing this letter...

As a 20-year veteran of the HR and Staffing industry, I’ve assisted companies in the restructuring of their workforces many times over.

Enough to tell you that nobody wins in this situation.

So, let's forget that's even a possibility.

Laid-off workers and their families suffer emotionally and financially.

Employees who keep their jobs must cope with survivor’s guilt and extra workloads.

The managers who made the difficult decisions of who to keep and who to let go get ulcers, often self-medicate, don't sleep, and carry the weight of the decision for the rest of their lives.

Again, nobody wins.

And yet, I’m writing this to CEOs because you are at an important crossroads in your leadership legacy. Your short-term actions now will have long-term consequences on your reputation.

First, you must decide whether you need to layoff, furlough, or ask everyone to take pay cuts. 

Each company’s situation is unique, but in my experience, while it might sound great to keep everybody and cut pay, it actually does not always work so well.

First, your entire staff is now financially compromised.

Secondly, those who really should move on are not in a position to do so because they aren’t free to look for a new job.

My experience is that it’s better to lay off so employees can collect unemployment and start to focus their job search on new opportunities.

If you'd like to have a discussion about this privately, please feel free to reach out to me via LinkedIn and I can tell you the pros and cons for your situation.

But, that's not what I want to share with you today. I want to talk about why it's so important you do three things right if you conduct layoffs. They are as follows:

1. Don't amputate by the inch. It is very important right now that you make deep cuts and get yourself to profitability. Laying off in waves is one of the worst things you can do. I realize it's very hard to predict your financial future, given everything that's going on right now. But, the goal now is to save as many jobs as possible and you can't do that if you continue running at a loss.
2. After the layoff, over-communicate with those that remain. Your employees who survived the cuts will be reeling from the feeling they are next. You need to be extremely transparent with them and give them more information than you ever have before to help them know things are going to be okay. Explain why you need them to perform at their highest level. This is a time for excessive communication. Constant communication. Daily communication. Hourly, if necessary. You need to circle the wagons and band together as a team and talk as much as possible. You may not have all the answers, but the mere fact they have such incredible access to you at this time is critical in holding on to their trust and keeping their respect.
3. Give job search assistance to all those laid off. No exceptions. Unfortunately, executives and managers generally know to negotiate for what’s called “outplacement services” so they can get one-on-one help with their resume, LinkedIn profile, cover letter, and job search and networking strategies. Studies show people that receive outplacement get hired 2X faster than those that don't. More importantly, outplacement is a way for them to move through the stages of grief faster so they can get their job search in gear. Not only does outplacement cut down the amount of time your former employees are on unemployment, it also reduces the impact on your unemployment insurance rate from the government in the future. But, above all else, giving outplacement is equally about YOUR reputation as a leader and employer.

Why?

Letting employees go without any job search support sends a very negative message. Get ready for your Glassdoor and Indeed review pages to explode with negative comments.

Trust me when I say when this is over and you are hiring again, every future candidate will ask how you treated those you laid-off. Being able to say you made sure every single person got one-on-one job search coaching will show just how much you care for your employees. 

For those of you told by your CFO you can't afford to pay for outplacement, you’ve been misinformed.

Yes, traditional outplacement has historically been very expensive (i.e. $2400/employee) which is why companies often only give it to managers or higher.

However, a lot of the old-school outplacement companies have not kept up with technological advancements needed to provide 24/7 online access to career coaches and resources. As a result, they are overpriced and outdated because they can’t provide truly effective virtual coaching.

What your CFO and HR team likely don’t know is in the last couple of years, some outplacement companies have invested heavily in their tech stack and built completely agile platforms that make it 100% safe and effective for your layoff recipients to get the help they need virtually—and for a fraction of the cost of in-person outplacement.

For example, at Work It Daily, employees get a full 12 months of job search coaching, which includes a phone app they can use to message the coaches for private one-on-one help for only $199/employee. 

Keep in mind, the unemployment applications are at historic levels. This means, federal and state-funded unemployment job coaching resources are not equipped to help this many people.  

The least you can do is find an affordable option that gives your former employees a fighting chance to find work faster when this is over.

This is likely the most challenging situation you've ever faced in your professional career as a leader.

Yet, you didn't get where you are today because you are weak.

You have grit.

And eventually, this will be over. You also know with this type of massive disruption comes opportunities.

Some say it’s going to be the fourth industrial revolution.

So, it's likely you're already trying to think about how to take advantage of those so you can get your business back to where it once was and even possibly try to hire back all those affected.

I know you have strong values and are committed to serving your employees the best you can. So, I hope you will consider my advice.

As we’ve been told (and likely have told others), A) actions speak louder than words, and B) people always remember how you made them feel in tough situations.

As a CEO, when we do the right things and provide the right resources in times of crisis, we’re also remembered for all the right reasons.

I hope you, your family, and your extended work family stay safe and healthy.

Sincerely,

JT 

P.S. - If you'd like to learn more about Work It Daily's outplacement services you can click here.

P.S.S - If you are a layoff victim reading this I want to help you. Click here for my free training and downloadable PDF on how to tackle the job search after being laid off.