Is your company considering downsizing? Various reasons might be influencing your need for workplace reduction from the impending nationwide recession, cutting organizational costs, mergers, natural disasters, industry-specific declines, company’s failure, outsourcing, or other reasons. Layoffs need to follow their own set of policies and practices as not to break federal and state statutes and to prevent class action or collective action lawsuits. Before starting the tedious process of mass layoffs, your company might want to consider alternatives such as widespread hour reduction, using a voluntary separation program (VSP), or eliminating wasteful practices. HR Synergy can help you decide the best choice for your company. Contact us today to learn more.
If widespread layoffs make the most sense for your company, you should devise a strategic approach so as not to demoralize employees, cover your legal basis, and keep your company in good public-standing. Selection criteria for layoffs needs to be carefully considered, especially when unions are involved. There are five main ways to choose employees for layoff: seniority-based, employee status-based, merit-based, skills-based, and multiple criteria ranking.
| Selection Criteria | What is it? | Pros | Cons |
| Seniority-Based Selection | Layoff “last hired/first fired” | Lowers risk of age discrimination (ADEA) lawsuits | Doesn’t protect the employer from other discrimination suits
Employees with outdated skills may be retained |
| Employee Status-Based Selection | Layoff part-time workers | Gives greater job security for core workers | Not enough of an impact to the bottom-line if you have few contingent workers |
| Merit-Based Selection | Layoff lowest performing employees | Retain best performing employees | Performance information can be biased and not have thorough documentation |
| Skills-Based Selection | Layoff least skilled employees | Retain employees with most sought-after skills | Potentially exposes you to lawsuits based on ADEA |
| Multiple Criteria Ranking | Layoff using a combination of all the criteria above | Retain senior, high-performing, well-skilled employees | Lessened combination of the above |
Transparency about selection criteria is imperative during the layoff process. It is helpful to underscore that the layoff is not about employees, but instead about positions. Contact us for more information to determine the right selection criteria for your company’s layoffs.
There are effective practices in and legal ways to implement layoffs.
Federal/state/international laws and municipal ordinances/regulations must be considered prior to conducting a layoff. We also encourage you to look into the federal EEOC and the state fair employment practice laws as to avoid discriminatory charges. HR Synergy is well-versed in these and other important topics to consider prior to carrying out workforce reductions. We would love to chat with you about these and other issues to consider before implementing layoffs.