The COVID-19 pandemic and world-wide inflation has forced many businesses to consider layoffs and other cost-cutting measures in order to stay afloat. While this is often a necessary step to take, it’s important for employers to handle empathetic termination with care.
In this article, we’ll share five empathetic termination practices that employers can use when considering retrenchment. By following these practices, you can help your employees transition to their next job with as much grace and ease as possible.
- 1. Don’t set a trap that waits for a “Firing Offence”
- 2. Prepare and practice empathetic termination conversations
- 3. Be clear, forthright and remain calm
- 4. An empathetic termination never, ever shifts the blame
- 5. Ensure a generous severance package and accurate leave encashment
- BONUS TIP: Empathetic termination letter samples for a post-conversation follow-up
- A) For lay-odds / downsizing
- B) For poor performance / conduct / attendance
- C) For contract termination
- CASE STUDIES: How IBM and American Express handled retrenchment well
1. Don’t set a trap that waits for a “Firing Offence”
Termination is never an easy process to carry out. That is why many managers procrastinate and give underperformers multiple chances. Some might even wait for a dramatic event or ethical breach before firing the employee in mind. This essentially sets a trap that springs an unpleasant surprise on the employee. It goes without saying that this is the worst way to relay bad news.
Instead, see if you can identify a trend line of underperformance and/or toxic habits that demoralise and disconnect the team. After all, it is important for a business to assess team members for their skills, potential and impact on the health and growth of the company. And of course, ensure that you routinely share this feedback to all levels of employee, especially if they are not meeting goals. Employees who are adequately aware of their consistent underperformance would understand the urgency of bucking up or potentially facing retrenchment.
As the employer, you may try mentoring, training, and other methods to fix the problem for a period of time. If the employee’s performance and attitude is not improving and still compromising the rest of the team, it is time to act.
2. Prepare and practice empathetic termination conversations
When it comes to terminating employees, it is important to be prepared and practice difficult conversations. This means thinking about what you are going to say ahead of time and practising it if necessary. It is also important to be clear and concise when communicating with employees.
So, try rehearsing for difficult conversations. Consult your HR person or an appropriate confidante who can run through a range of reactions to see how you handle each scenario. It’s smart to go over a termination conversation with an HR professional ahead of time; he or she has more expertise and experience in this task than most other managers and will be able to offer you good advice.
You can also consider self-talk exercises. This can actually remind you of the importance of carrying out this necessary termination professionally and humanely. Remind yourself that as a manager, you may deserve some of the blame for the person’s failure, owing to poor hiring or coaching. And, to avoid becoming defensive, focus on the optimal outcome; you want to help this person find a place where they can maximise their potential—a place that better fits their skills, personality, ambitions, and style of working.
Ensure you are polite and professional throughout the process. And never make any personal attacks or derogatory comments.
3. Be clear, forthright and remain calm
If you are an employer who is considering retrenchment, it is important to be clear, forthright and calm when communicating with your employees.
During the discussion, be as straightforward as possible. Attempts at humor or displays of emotion or commiseration might lead to offending or misunderstanding someone. Once you deliver the basic message, it’s best to shift the discussions to severance, benefits and a transition plan. This will help the organisation move on promptly with their next steps—which are organised so that it’s most helpful for the departing employee, with minimal disruption to the company.
Employees will likely have many questions, and it is important to answer them as fully as possible. Try to also remain calm throughout the process. This can be a difficult and emotional time for everyone involved. However, remaining calm will help to set a positive or neutral tone for the conversation.
This is a difficult situation for everyone involved, and it is important to remain professional.
4. An empathetic termination never, ever shifts the blame
Another common mistake people make when firing an employee is to imply that the decision was made by someone else – the board or a higher-level executive. Managers or CEOs may imply it was a decision of someone else to avoid incurring the terminated employee’s anger. While most firing decisions are made with at least some collaboration, suggesting you played no part in the decision is a cop-out. The person communicating the decision should always maturely express personal responsibility for being a part of the decision.
As an employer, you may be tempted to hand the entire responsibility for firing to an HR person or a third party. That is a cold, harsh, and uncaring practice that I would encourage you not to use.
However, to make the process as smooth as possible you can have an HR person help you navigate the termination meeting. They will serve as a witness and answer any questions about severance or benefits that you might not be able to answer.
Not doing your own firing is a failure to clean up after yourself. Eventually the whole company will pick up on your inability to face tough issues.
5. Ensure a generous severance package and accurate leave encashment
When you offer a generous severance package to a terminated employee, you give them a fair chance at starting over. If the employee accepts, they waive their right to litigate, which keeps your business safe. In regards to mental health, this practice can also alleviate any guilt you might feel for carrying out the termination. You should prepare (a) financial severance, (b) professional outplacement assistance, (c) specific information about compensation for vacation time earned and various benefits, (d) clear information on health insurance plans and (e) the signing of legal release documentation.
Generosity around layoffs helps to reduce the risk of legal issues and intra-office conflict. It also sends a message that the company cares about what happens to an individual after the termination. And as you make this judgment, recognise that when a newcomer fails to perform, some of the responsibility falls on the hiring manager. That should make the company more willing to cover some of the terminated individual’s financial losses.
You’ll also want to make sure that you provide the retrenched employee with the accurate leave encashment that he/she is entitled to.
Depending on the statutory laws you need to follow, you may calculate leave encashment by adding the employee’s number of annual leave days to his/her number of already-accrued annual leave days, and then multiply this total by the employee’s daily rate. If the retrenched employee is entitled to any other types of leave, such as maternity or paternity leave, you will need to calculate the encashment for these types of leave separately.
Auto-calculate your leave encashment with Talenox.
Whether it’s compassionate leave, sick leave, a sabbatical or leave encashment – Talenox automatically calculates the balance and sync the data into your payroll numbers.
BONUS TIP: Empathetic termination letter samples for a post-conversation follow-up
A) For lay-odds / downsizing
Dear (Recipient Name),
Over the last several months, [Company Name] has experienced financial difficulties due to lack of work in our industry. We have explored many options, including the introduction of new products to replace those made obsolete by technological advances. Unfortunately, our efforts have not resulted in increased sales and work.
After reviewing our options, we have concluded that we must eliminate approximately [number] positions. It is with deepest regret that I inform you that your position is one that will be eliminated effective 2022.
Within the next week, a representative from Human Resources will call you to set up a meeting. During this meeting you will learn about your separation benefits that include the services of an outplacement firm to provide counseling and assistance in finding another job.
Please accept our appreciation for your contributions during your employment with [Company name].
(Name of Manager)
B) For poor performance / conduct / attendance
Dear (Recipient Name),
This letter confirms that your employment with [Company Name] is terminated, effective as of 2022.
Performance: We have concluded that your performance does not meet the requirements of the technician position. In your 2021 performance appraisal, your supervisor noted that you needed improvement in your technical skills and attention to detail. The company provided you with two additional weeks of task-specific training with a coach during the first quarter of 2022. However, the performance problems continued throughout 2022. Your supervisor gave you three written reminders of the need for performance improvements in 2022 and again noted the need for additional improvement in your 2022 performance appraisal. Since that appraisal, it has become apparent that your job performance simply is not consistent with the requirements of your position.
Misconduct: We have concluded, following our investigation, that your conduct toward other employees on 2022, violated the company’s [name of specific policy] policy. In particular, your display of sexually suggestive photographs in your cubicle and your explicit language in describing those images to others were direct violations of company policy.
Also, you received a written warning and additional training on your obligations to avoid such conduct in October 2022.
Attendance: Repeated absences and failure to call in before missing a meeting can cause a ripple effect through the entire department. One employee’s absence affects teammates who have to consequently work faster to catch up so their down-line coworkers have the parts needed to complete their work. Furthermore, delays in production of even a few units per day add up over time and make it more difficult for the entire organization to meet its goals.
Payment for your [remaining benefits: accrued sick days, PTO, vacation, etc.] will be included in your final paycheck which you will receive on your regular payday. You will receive a letter by mail outlining the status of your benefits.
We will receive your office keys and laptop at the termination meeting.
Please keep in mind that you have signed [non-disclosure/non-solicitation agreement/other relevant policy].
If you have any questions, please contact [contact name].
C) For contract termination
Dear (Recipient Name),
This letter is to inform you that as of 2022, we will no longer require your services.
We’ve enjoyed working with [name of company] but due to [reasons], we have decided to terminate our contract.
All outstanding deliverables should be completed before our contract is officially terminated. Please send us any pending invoices by 2022 so that we can clear any outstanding amounts by 2022.
Please note that as of 2022 you will no longer have access to [relevant networks, systems, etc.].
Thank you for all your work over these [weeks/months/years]. If you have any questions feel free to reach out at [phone] or [e-mail address].
CASE STUDIES: How IBM and American Express handled retrenchment well
There are many examples of employers who have handled retrenchment well. One company that did this is IBM. In 1993, IBM was facing severe financial difficulties and had to lay off tens of thousands of employees. However, the company did not simply fire its employees. Instead, it offered them a generous severance package that included outplacement services and counseling. IBM also continued to provide health insurance for its laid-off employees. As a result of these empathetic termination practices, IBM was able to avoid the negative publicity that often accompanies mass layoffs.
Another company that handled retrenchment well is American Express. In 2001, American Express had to lay off 7,000 employees due to the 9/11 terrorist attacks. The company offered its laid-off employees a severance package that included one year of salary and health insurance. American Express also set up a $10 million fund to help its laid-off employees find new jobs. These empathetic termination practices helped American Express avoid negative publicity and maintain good relations with its former employees.
These examples show that it is possible for employers to handle retrenchment in a way that is both humane and practical.
When faced with the difficult decision to retrench employees, it is important for employers to ensure each empathetic termination is handled with care. By following the practices outlined in this article, employers can help their employees transition to their next job with as much grace and ease as possible.