Recalling the Brutal Layoff Lessons of the Great Recession

For those of us who were HR practitioners of the past 15 or so years, the Great Recession of 2008-09 was the worst time to be in this field. We’d wrap up one round of layoffs just in time to plan the next one (but don’t pity us; unlike so many people in those years, we generally kept our jobs).

We’re all hoping that the coronavirus pandemic will not prove to be as serious as feared, either for public health or the economy. But it’s hard to imagine there won’t be difficult economic repercussions for some time to come, such that many employers may need to reduce their workforces for some length of time. If that becomes you, you’ll likely need to act fairly quickly (as many have already), in which case you may find it helpful to read the lessons many of us learned through the last stretch of painful times. I hope this proves to be something of a “Dewey Defeats Truman” article, but even if so, you might want to tuck it in a drawer for some future crisis.

A warning: I’m a nice guy. What follows is not nice. But it is what works.

1. Even in bad economic times, it remains imperative for you to retain your top talent. In fact it’s probably more critical in hard times than in good, because your A players are the ones who will help you stand your business back up when good times return. Even in bad times, what I like to call the Iron Law of Talent holds true:

a. Good people always have options, so

b. They don’t need your crap.

Now, I realize that most employers want to take care of all of their people, and that’s really admirable. But the simple truth is, in bad times your priority as an employer must be to take care of your best people. Remember, though, that it’s not enough that you give your top talent confidence in the business so they stay: You have to convince your top talents’ significant others that he or she should stick with you too, and the only way you do that is through your employee. The recommendations that follow are really offered with that goal in mind, though they apply as well to most all of your workforce.

2. Avoid general reductions in hours. Having all employees work less hours as a way of spreading the pain equally is ok if it’s for a brief period (less than a month) with a pretty firm end date. But if people are initially grateful just to have a job, it doesn’t take long before everybody’s sick of lowered incomes and then the morale of the entire organization suffers. Gut-wrenching though the implications are, you’re far better off trying to remain a viable, competitive employer for a smaller number of people – especially your best people – who can create a productive morale level than employing a lot of people who can’t be satisfied under those conditions.

3. Keep your workers compensation carrier or TPA’s number handy. Injuries such as to the inscrutable lower back can make an uncanny surge. I’m just saying.

4. Communicate a lot, and in person. If you want your good people to stick this out, you have to show yourself to be worthy of their trust (and their significant others’). So your leadership team has to be in front of people – including those at the remote sites and on the backshifts (you can sleep next month). Your people have to hear and see leadership’s grasp of the current crisis, their plan to get through it, and their confidence in the future success. People also have to hear leadership’s answers to their questions. Posted memos are not substitutes.

5. Don’t BS people. Ever. Above all, communicate facts and truth. You may not be ready to announce your next round of layoffs, but don’t kid yourself: No carnival gypsy fortuneteller is more adept at reading tea leaves than employees, especially when they’re hearing about the senior managers shuttling in and out of the conference room which the President, CFO, and HR leader haven’t left for two days. So if an employee asks leadership if layoffs are coming, don’t blow your credibility on some mealy-mouthed answer at a time like this. No matter the timing, if that’s what’s coming, the only acceptable reply is, “I’m sorry, but yes.”