Inclusive Layoffs are Possible. Here's How...

Yes, layoff season is upon us.

I have been flabbergasted with the approach a number of companies are taking when it comes to layoffs. Mass layoffs via Zoom, firing pregnant employees, contract employees fired without regard to diversity implications…the list goes on.

In fact, BuzzFeed published an article on?34 ways employees?had been fired during the layoffs this spring.

What happened to empathy in the workplace?

Meanwhile, many companies have staked their brand on their commitment to diversity and fostering cultures of inclusion. They’ve invested a good deal of money and time into ensuring inclusive recruiting and hiring practices, as well as promotion and advancement opportunities for previously underrepresented talent. But when it comes to layoffs, it begs the question, what happened to all of that investment in DEI?

I, along with PrismWork co-founder Corey Jones and collaborator Rebecca Weaver co-authored an?article?for Harvard Business Review that honed in on why inclusion should be top-of-mind during layoffs. Here are some additional learnings we think modern leaders should know as they consider downsizing their companies.

Emotional Leadership Skills are Essential

In our culture transformation work, we have helped clients embed inclusion into every aspect of the employee lifecycle. The focus has been on recruiting, hiring, talent development, reviews, recognition, pay equity and more. But, more often than not, separation is ignored–likely because companies don’t like to admit it will ever happen. So, it’s no surprise that leaders find themselves ill-equipped to navigate this phase of the employee lifecycle and struggle with how to be inclusive while being forced to structurally exclude a portion of their workforce.?

I understand how difficult this can be for all parties involved. I have been laid off and have been a CEO of a company who had to make the excruciating decision to lay people off. My approach is the same we provide our clients: be a human first. Obviously, this sounds much easier than it actually is in practice. But, being human first is also essential to fostering inclusive cultures–even in the best of times.?

If Covid-19 has taught us anything, it’s that we know showing up with empathy is critical. But somehow when it comes to layoffs, being human and bringing empathy to the equation is getting lost. Leaders need a new model for leading in the midst of a crisis.?

A Guide for a Human-First Approach

At PrismWork, we have designed a leadership model called HEARTI based on the six core competencies essential for today’s leaders: Humility, Empathy, Resiliency, Transparency, and Inclusivity. HEARTI provides a useful framework to help leaders manage through difficult situations, like layoffs.

Humility

A number of research studies, including a recent one conducted by?Catalyst, have concluded that humble leaders listen more effectively, inspire great teamwork and focus everyone (including themselves). Leaders who practice humility ask employees for their opinions, acknowledge and amplify the effort and impact of team members, and are highly effective at making employees feel empowered and validated. This is vital in situations where employees feel vulnerable. Being laid off is a traumatic experience—the affected individual may feel unvalued, hurt, angry and afraid. It is important to ensure the individual has an opportunity to be heard as part of the communication process–even if, for the leader, their feedback is difficult to hear.?

In May, Unicorn company Cameo Fameo laid off a quarter of their overall workforce. CEO Steven Galanis made an effort to demonstrate his own pain at making the difficult decision about the layoffs. He did this in a public manner via Twitter. “Today has been a brutal day at the office. I made the painful decision to let go of 87 beloved members of the Cameo Fameo. If you’re looking to hire hungry, humble, smart, kind, curious learning machines who love to win – and you see Cameo on their resume – look no further.”?The employee reactions on social media reinforced this approach indicating they felt valued and honored, despite the unfortunate circumstance.

Empathy

Empathy may be the secret sauce to retaining and finding employees in the face of “The Great Resignation.” A recent?survey?by EY Consulting found that 90% of US workers believe empathetic leadership leads to greater job satisfaction and 79% agree it decreases employee turnover. Empathetic leaders are able to understand the needs of others, are aware of their own feelings, and accountable for their own behaviors. Like humility, empathy is an emotional skill. Unfortunately, emotional skills have long been undervalued in the workplace in favor of rational skills, likely a remnant of the industrial age where humans were valued in machine terms.

While scripts and coaching can prompt leaders to listen in a layoff situation, empathy requires authenticity. Brian Chesky, the CEO of Airbnb, won praise for his empathetic approach when he laid off employees in the midst of Covid-19, but many CEOs forget empathy when delivering layoffs. Recently, we saw this happen at the mortgage startup Better.com and Carvana. Electric scooter company, Bird, eradicated the human element by simply delivering a pre-recorded video with a “disembodied voice” when it laid off 400 of its employees. Technology is a great asset in many situations, but not a human replacement. While efficient, using technology to mass communicate lacks compassion and can deal a hefty, and likely lasting, blow to company culture and employer brand.

?Accountability

Accountable leaders clearly communicate their goals and their objectives and key results (OKRs) to their teams to foster alignment and group focus. They accept responsibility when things go wrong, and give credit for success where it's due. But what does accountability mean in a layoff process? People have a need for clarity and direction, especially during transitions.

Providing leaders with a clear timeline of actions that provides essential information to employees is key. In a situation where an affected employee has a question a leader can’t answer, it's critical for that leader to take responsibility and follow up in a timely manner.

Making sure the company systems are in place to ensure ongoing business viability is key. Leaders often spend much time focusing on the employees who are leaving, but those who stay often have to pick up workloads and keep the business moving forward. Building an effective plan for how this gets done and what to do if issues arise demonstrates to retained employees that they are important, too.

Resiliency

Resilience is not just about the ability to recover readily from adversity and bounce back from change. It’s also about learning from the experience and doing better next time. While most people believe resilience is an innate trait, in truth, it's a learned behavior and resilient, vulnerable individuals can apply strategies to build skills. Stanford Professor Carol Dweck’s work on growth-mindset proved that success is built on our resilience and that it can be improved.

Just like any other leadership competency, it's important to recognize that there are individuals who possess strong capabilities in this area and others who do not. People who have high resiliency tend to view change as an opportunity for growth and adapt quickly. Others who typically operate with a fixed mindset, adapt more slowly and may react in unexpected ways when presented with an uncomfortable situation.

Training managers upfront so they understand to expect a variety of emotional responses and teaching them to keep an eye out for the reactions of both retained employees and those who are leaving will equip them with the tools to respond. It’s important for them to understand that the goal is not to immediately push through the uncomfortable, even painful emotions too quickly, but instead allow individuals the grace to experience their emotions in their own way. Getting to a place of renewed optimism is, of course, best for productivity for the organization as well as each individual’s own well-being, but it is likely unrealistic this will happen in an accelerated or uniform fashion. Leaders who possess the skills to be accountable for managing their own emotional responses while respecting those of others are best suited for the task of communicating layoffs. It’s often unrealistic to assume all leaders are capable in this area and so upfront coaching and ongoing support is key.

?Transparency

Transparency is essential—not just during the layoff process, but as a core component of communications best practices in general. We advise our clients to be honest about company financial performance and pressures. Open and honest communication helps to create trust between leaders and employees even when the news is bad or incomplete. Employees often complain about being blindsided when layoffs occur. Layoffs should not come as a complete surprise from companies that provide open and honest information about company performance. If leaders have done their job effectively communicating, the external pressures (whether it be global pandemic, economic downturn, or the loss of a key client) will make sense to employees and the blow may be lessened. Transparent communication about company changes to talent strategy allow people to emotionally prepare for change even before layoff announcements occur.

Transparency requires preparation for the layoff event and this means organizing the overall communication strategy, including severance packages, logistics, FAQ responses, the role of the executive team, managers, HR, IT and any other team member who will be involved in notifications. A tight connection between internal and external communications and HR should occur long before a situation like this occurs, so integrated communications processes and teamwork are established. It’s important to communicate frequently, clearly, and with empathy. Change management is hard, but providing open, honest, transparent opportunities for people to share feedback and voice their concerns can have a positive impact.

?Inclusivity

PrismWork clients tell us that when they are recruiting, the vast majority of potential talent wants to understand the company’s DEI story. “What are you doing to foster an inclusive culture?” is at the top of many interviewees’ list of questions. A company that has invested time, money and effort into building an inclusive culture does not want to have its employer brand story compromised. And, more importantly, the last thing a company truly committed to inclusion wants is to have its diverse talent believe they have been targeted in the layoff process.

Our HBR article,?Don’t Let Layoffs Undermine Your DEI Efforts,?goes into this area in much more detail.?

The good news is that when the downsizing process is over, leaders have an opportunity to reset the culture by making diversity, inclusion, and belonging foundational to the company. Slowing down to speed up when the time is right means having a chance to reset in a way that truly fosters a culture of inclusion.?

We are proud that HEARTI is being established as a framework that really stands for inclusive leadership. We know it's the foundation for inclusive behaviors beginning at the individual level and transcending to the workplace and community levels. If culture is THE competitive advantage, having a soul like HEARTI is essential.

-Daina

Daina is a collaborator at PrismWork. She has nearly a decade of experience as an operator, director and advisor for public, private, PE and VC-backed companies. Her unique background of operational leadership and executive coaching experience guides her advisory skills helping companies to build and manage global teams, establish new categories, optimize marketing, nurture company cultures, and deliver results across small, medium and large organizations.