Deciding Who To Layoff: Ask Yourself These 10 Questions
What to Consider When Downsizing Your Team
It might be the most delicate and sensitive topic that you as a manager will face in your career: selecting the names of those people to let go or make redundant. The context here is reducing the size of the organization to maintain profitability, or improve efficiency, not firing someone due to misconduct. From a business perspective, the size of the organization has significant impact on costs, and when costs need to be controlled it typically requires reducing the size of one’s organization. From a human perspective, though, letting employees go affects that person’s livelihood, as well as the morale of those that remain with the business. These are not decisions to be made lightly, and yet they are selections that must be made. But how do you choose the names of those you let go? What should you consider? Here are 10 questions you should ask yourself when making layoff and downsizing decisions.
1. What Should I Not Consider?
Before looking at the names, be sure to fully understand the legal and economic boundaries of downsizing in your area. Legal and financial boundaries differ between states, provinces and countries. When deciding who to layoff, such limitations may impact your decisions.
Key Things That Should Not Affect Your Decision:
- Sexual Orientation
- Length of Service With Company
- Personal Circumstances If Terminated
2. Where Do You Have the Most Performance Issues…. and WHY?
If there is one good thing about having to layoff employees, it is that layoffs are a chance to clean your house. Poor performance can mean any number of things, including quality of work, a tendency to disrupt others, failure to meet commitments, and the need for excessive touch-points to work through a given task. If your best friend outside of work asked you who your lowest performers are, what would you say? Why would you say it? More than likely, you don’t need to think long to answer.
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3. Are They Essential to the Business?
Essential means your company cannot operate without a person’s duties being performed. If Jim is the only person in the company who knows how to operate a piece of equipment, or is the only one who knows the passwords to the company server, it’s probably best you retain him. If you have concerns with that person’s performance, get some cross-training going.
4. What Is Their Future Value to Company?
When making layoff decisions, consider each employee’s future value the to the organization. The past is the past. He or she may have done some good things during their time with the company, but this question is focused on the future. Do they have special skills, experiences or knowledge that will serve the company well going forward? Are their skills aligned to what the future organization will look like? Consider the future state of the company and how he or she will play a role in it.
5. Are They on Your A-Team, B-Team … or C-Team?
An executive I once spoke to shared his view on a strong organization. “You can’t have all A-Players. They are your visionaries and strategic leaders. You always need B-players, who are the worker bees that put vision into practice.” He then went on to talk about the C-players. As he described it, the C-players are those who are not the pillars of your team, and are not the key talent that makes the organization successful. Nor are they the B-players, who may not want to be in the spotlight, but are dedicated and meet their commitments. The C-player are the ones who coast, the ones that you’re least likely to go to in a crisis situation, and the ones whose work you typically worry about the most. The C-players need the most hand-holding.
6. Do They Have the Potential to Grow Within the Company?
Look at the employee’s career trajectory. Where do you see him or her going (if anywhere) within the firm? Of course, just because an employee does not want to be CEO doesn’t make them valuable. Do you see them being a great sales person in the future? Do they have the potential to become a senior technical member of your company? Are they good at developing others and will become effective managers some day? Growth from within helps maintain your business culture and organizational continuity over time, so retaining solid talent and good cultural fits in your organization is always a good thing.
7. Will They Stick Around?
Employees will come and go over time. Typically, employees will stay and grow within the company when they feel they have sufficient opportunity and compensation, and are happy with the work they are doing. But sometimes, you know they will not stay for long. They may have an extremely long commute or their family may live in another city. Or, they may simply not be happy and you know it. Though perhaps a lower-weighted reason, this sort of information might be of use in your decision-making process. When looking at the organization as a whole, it might just make more sense to let the person go rather than have them quit in 6 months forcing your to go through the effort of replacing him or her.
8. Are They In The Right Position or Role?
Before assuming someone is under-performing and deciding to put them on the downsizing list, be sure to consider their role. Just because someone is struggling does not mean they are not of value to the firm, they may just be in a role that doesn’t match their skill set. A good way to evaluate this is to look at their past performance. Maybe you made a switch a year ago that was just a bad experiment. Were they a rock star in prior position, but have since struggled in their new assignment?
9. Do They Have an Attitude Problem?
Diversity within a team, as well as having people with different backgrounds and experiences is a good thing as it creates an enriching environment where ideas can be shared and discussed. But there are limits to this. You do not want individuals who routinely cannot get along with their teammates, nor do you want those who constantly have bad attitudes. Further, when individuals are simply unpleasant to be around, it can create a toxic environment. Your team needs to work together in a healthy manner. When there are pieces within that team that create tension or with whom others simply do not want to work, this may be a candidate for letting go. Don’t let one bad apple (or one bad hire) spoil the bunch.
10. Can Someone Else Do That Job?
If you have a team of good performers who are dedicated to their work, sometimes your selection will simply come down to consolidation. For example, if you have a Shipping Department as well as a Receiving Department, consolidating these teams given the job functions are similar may make the most sense. Take a close look at areas where work being done by individuals or groups can be absorbed by others with minimal impact on the organization. With layoffs often comes restructuring and organizational changes. Don’t get fixated on the lines and boxes on your Org chart – do what makes the most sense.
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