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Talent Management During the COVID-19 Crisis—Part 4: Conducting Layoffs Right

By Mark Allen, PhD

One of the more heartwarming news items during the COVID-19 pandemic has been the number of organizations that have continued to pay workers who are not working.

Of course, if your organization does not have the financial resources to compassionately keep all your staff on the payroll, you might be facing some tough decisions to temporarily (I hope) or permanently remove some workers from your workforce. Whether we call it furloughs, layoffs, or firings, we’ve all seen the statistics of the massive numbers of workers filing for unemployment benefits during the coronavirus crisis.

Ways to Reduce Your Organization’s Payroll

Cut Salaries

There are many ways to reduce your payroll. If you’re hesitant to cut off income and benefits to individuals and families during an economic and health crisis, one possibility is to temporarily cut salaries. Instead of laying off 20% of your workforce, perhaps cut everyone’s salary by 20%. It is more compassionate (and possibly better for the overall economy) to have everyone suffer a little rather than have some people suffer a lot.

Cut Less-Productive Employees

If you must cut jobs, do so wisely. Remember, people are our most valuable asset, so you’re not just cutting costs, you’re eliminating assets. Sometimes we think it’s most fair to cut the newest arrivals. While that might match some people’s views of fairness, it’s not necessarily best for the business. If you’re going to be operating with a reduced staff, it is essential that you retain the most talented people. It’s best for the business to cut less productive contributors, even if they are more senior. 

Decisions about layoffs can be among the most difficult ones executives have to make. Having an objective performance management system—one that relies on objective measurements based on SMART goals as opposed to subject manager evaluations on a 1-5 scale—is a valuable tool to assist with these decisions.

Practice Redeployment

Another mistake is often to eliminate good people who are in a role we no longer need. If there’s a certain role or department that must be eliminated, it is often a mistake to just eliminate all the people in that role or department. A smarter choice would be to redeploy the top performers in that area to another part of the business, perhaps to replace lesser performers who happen to sit in a more necessary department. Just because you need to dispose of a seat, that doesn’t mean you have to get rid of the person sitting in that seat.

As odious as layoffs can be, there can be a silver lining. The crisis can be an opportunity to get rid of low performers—people we might have hesitated about eliminating in the past due to seniority reasons or other concerns that were not related to performance. I have worked in Higher Education for decades and have a degree in the Higher Education Administration. Wherever I’ve gone in this industry, there are always whispers about “dead weight”—professors who are no longer very productive, but nothing can be done because these people have tenure. Tenure is not an absolute guarantee of lifetime employment. Tenured faculty can be eliminated for reasons of financial exigency. The COVID crisis has most definitely put many universities in positions of financial exigency. If faculty must be eliminated, now is the time to consider the people who will be the greatest assets to the University moving forward. Especially as the world of higher education is changing into a world in which online teaching might be a part of our world for the foreseeable future, it is more important than ever to ensure that we have the right talent on board to help us navigate in this changing world. This principle is true in every industry that is facing hardship or reinvention.

As tough as decisions about deployment and layoffs may be, it is more important than ever to ensure that we have the right talent in place. One of the fundamental principles of Talent Management is to always strive for the 6 Rs: making sure you always have the Right Person with the Right Skills in the Right Job at the Right Time in the Right Place for the Right Cost. Instead of doing what is easiest, it is imperative that we consider the all-important 7th R: Doing the Right Thing. 

Learn More About Talent Management During the COVID-19 Crisis

This article is part of a series on talent management during the worldwide coronavirus pandemic. Click a link below to read more: