How to handle layoffs with compassion and integrity

Chief people officer at Wave talks about challenges for business leaders struggling with corporate costs

How to handle layoffs with compassion and integrity

It’s deceptive to think that businesses are sitting on money paths that aren’t being passed on to employees – especially during the ongoing inflation crisis, says one Canadian people leader.

Ashira Gobrin, chief people officer at Ontario-based financial giant Wave, said that while employees may be suffering from a deduction in purchasing power post-COVID, their employers are going through the same situation.

“People are struggling because of inflation, cost of living has gone up, property is increasing in price, as is food and utilities,” Gobrin tells HRD. “But the costs for businesses have gone up too. From a universal perspective, the last time we had a globally more difficult situation, certainly in tech, was 2008.”

Layoffs and redundancies hit Canada

The 2008-09 Canadian recession was allegedly triggered by the “surge and collapse of United States housing prices during the 2000”, leading to a deterioration in the mortgagee landscape – something which Canada was not spared from. And while it was hard going in the labour market at the time, specifically the tech space, Canada eventually bounced back with higher wages and fluid money trains. 

Now, as we creep towards another potential recession, employees are rightly nervous – and this financial anxiety is seeping into workplaces like a miasma.

But how much is this employers’ responsibility? And when is it time to start considering downsizing?  

“For me, there should always be a focus on transparency,” says Gobrin. “Employees should know what they hold in terms of employee value proposition (EVP), they should know what their next promotion looks like and how to achieve higher pay. During the hard times, it’s employers’ responsibility to communicate this effectively.”

Following that, Gobrin recommends being clear when it comes to any potential layoffs. Canada has been hit with a slew of recent downsizes – with both Salesforce and Amazon announcing thousands of cuts early this year. And while layoffs are often expected or alluded to, it doesn’t make them any easier to deal with – or less anxiety inducing.

A recent report from Insight Global, found that three in four Americans are currently worried about losing their job due to economic uncertainty – something which is depleting morale in the workplaces. All the more reason to deal with layoffs openly and concisely.

“A lot of care needs to be taken when it comes to redundancies,” says Gobrin. “It’s not good doing one round of layoffs and then six weeks [later] doing another – it breeds anxiety. It’s really tough on the trust level too. Leaders need to look people in the eye and say, “Listen, these are tough times. We’ve tried everything we can but there’s going to be some layoffs – and this is how we’re going to do it.’”

Supports needed

Following layoffs, it’s important to offer employees resources such as mental health support or counselling to help cushion the blow. As Gobrin told HRD, the employer’s responsibility doesn’t end with the severance package — they have a duty of care to uphold.

“It can be easy to go on as if nothing’s happened if you haven’t been directly impacted by layoffs, but in reality it impacts culture on a whole,” says Gorbin. “Everyone will feel it in some small way. Employers need to start thinking about how they can look after the people that’ve looked after them for so long.

“Perhaps start looking at budgets and salary rises – make sure you have the money to pay everyone you’ve recently hired – or just step back from recruitment for a while.”

There’s no easy solution to the inflation crisis and every company will have to deal with their costs in their own way. However, as Gobrin tells HRD, there’s a lot to be said for clear communication from the C-suite to the management to the front line.

“Empathetic leadership will go a long way here,” she says. “Employers need to have that level of compassion not only for the people they’re letting go but for the ones they’re keeping. Look at how they’re feeling and just speak to them on a humanistic level.”

Understanding the impact of financial stress

Whether you’re downsizing or just tightening the purse strings, employers need to be aware of the acute impact financial worry can have on both an individual and an organization as a whole. 

Data from Ceridian released late last year found that 78% of employees are trying to up their monthly income to stave off inflation costs, with 80% of workers admitting to cutting back on expenses such as dinners out and retail shopping.

What’s more, this stress is seeping into the workplace, with eight in 10 employees saying they regularly worry about money while at work. This distraction in itself could cost the Canadian economy around $50 billion annually.

“Money doesn’t grow on trees,” says Gobrin. “It’s not always easy for employers to help their people – and sometimes it’s not feasible to raise everyone’s base salary. It’s more about having these honest conversations and working towards a solution together.

“If a company looks after an employee, that employee will double down for them in return – and that’s key during these uncertain times.”

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