The thought of layoffs creates anxiety both in the C-suite and among rank-and-file employees. But sharing the news with your colleagues properly can actually work to build trust in your organization, its leadership, and the decisions they’re making.
Layoffs perhaps have the most personal impact and require the most difficult decisions for executives. They don’t involve just the success of the business, but the lives and livelihoods of other human beings.
How CFOs communicate these significant changes is important — it will guide the rationale and the tone the company as a whole will use to share the message both internally and externally.
Once you know layoffs are likely to occur, the first step is to get a reduction-in-force messaging plan in place. A better option is to create that plan right now. Building your plan before the hard times hit allows you to establish which audiences — both inside and outside the company — you’ll need to reach and how you plan to reach them.
Because trust is built on a strong foundation of empathy, always keep in mind that layoffs aren’t just happening to the company; they’re happening to people, too. One of the best things CFOs involved in a reduction in force can do is show empathy, understanding, and genuine concern for the welfare of those affected. Remember that a layoff is an intensely personal event for an employee, and recognizing it as such will help convey that the layoff decision was a difficult one.
Employees are going to be concerned about providing financially for themselves and their families. Answer questions about compensation as quickly and clearly as possible. Some questions to be prepared to answer are:
Information about severance packages
Details on continued insurance coverage
Job counseling and search resources
The timing of the layoffs
Any other important questions specific to the company
Often the next thing employees will ask is the reason for the layoffs and whether they were necessary. All employees deserve to know why a decision was made. The CFO (and CEO) should be prepared to explain the specific reason for the job cuts. Did the company overextend itself? Are there external economic forces leadership didn’t account for?
Share openly the steps already taken to try to avoid making layoffs, whether it was buyout packages for long-term employees or executives taking a pay cut. In addition, leadership should own the layoff decision and not make employees feel that the layoff was due to something they did.
One of the best things CFOs involved in a reduction in force can do is show empathy, understanding, and genuine concern for the welfare of those affected.
The C-suite taking ownership of the decision is something both former and remaining employees need to see in action. As CFO, you should make yourself available to the marketing or internal communications department as a resource for crafting the message that will ultimately be shared with the public. Be sure to have talking points available, and be sure to stay on topic while answering questions truthfully.
The hope is that you will be able to help your company reach its goals without the need for layoffs. Not every company or management team is that fortunate. But if an organization that has to reduce headcount maintains the trust of employees, it can emerge from a difficult time stronger and more prosperous.
Cass Bailey is the president and CEO of Slice Communications.