Being fair in redundancy

I once talked to my father about how difficult it was to make someone redundant. As a former CEO himself, I thought he could relate. He looked me in the eye and said, “No, son. It’s a clear decision that is difficult to implement.” If done wrong, letting someone go has the potential to hurt your company in more ways than one. Here’s how to do it right.

July 16, 2020 6 mins read

In the UK, we’re looking at the beginning of the end of furlough. From August onwards, government grants will be reduced to reflect the returning workforce. Unfortunately, this also means that businesses that have not fully recovered will have to make difficult decisions to survive. And no decision is as gut-wrenching and threatening to workplace culture than the decision to let people go. 

It’s easy to see why. The IMF has called the pandemic the biggest economic downturn since the Great Depression — affecting both advanced and developing economies. Unemployment is at an all-time high, and it’s estimated as many as 42% of all US jobs lost so far could be permanent. The thought of adding to that? Definitely enough to ruin a few days. 

There is undoubtedly a wrong way to approach redundancy, and if you’re not careful, you can do things catastrophically wrong (like in Cirque de Soleil).  The process is emotionally charged and tough on everyone — the employees being made redundant, the team suffering the loss of a colleague and friend, and the leader who has to make the decision. 

So, what is the ‘right’ way to let someone go?

Anticipate the emotional fallout

Handling redundancy well is about understanding the immediate emotional and long-term impact of these decisions. This awareness allows organizations to anticipate and mitigate risks and support individuals, teams and leaders. 

Fearing my job is on the line

Employees and colleagues are absolutely right to feel afraid their job is on the line. The pandemic will take a lot of personal effort to recover from. The emotional scarring from unemployment is both deep and long-lasting. A recent study found that each six-month spell of past unemployment predicts lower life satisfaction after the age of 50, even when people had the opportunity to “heal” in later working life. 

The strong links between wellbeing and identity are poorly understood. This is why it’s culturally ok to dismiss people from their jobs at a moment’s notice in some countries. It’s also why international development programs perceive a change in livelihood – from fishing to agriculture – to be an obvious solution for communities dealing with the impacts of climate change. 

Work plays a critical role in our lives. So many daily rituals are entwined with the work we do – our journey to work, our social exchanges, our ideas about what success looks like. Many of the stories we tell ourselves about ourselves are linked to the job we do, how well we perform and the sense of belonging we feel.

Because of this, losing a job is psychologically shattering. Even if we didn’t like our jobs that much, when put on the line, we suddenly appreciate the security they brought us and our families. We feel the instant loss of autonomy that comes with being placed in a process we feel we have little control over.

Sadness and guilt as things change

During the pandemic, we’ve seen many leaders take on pain and guilt from redundancy decisions and withdraw from their people. Whilst this is a natural and understandable choice, doing so also makes leaders seem more distant and less human to the survivors, which in turn increases the pain in the organization. 

Talk to your team. Offer to answer questions in an “ask me anything” format so that everyone can share what’s on their minds. It will be tough but being open and available lessens the stress and anxiety caused by uncertainty. 

If there is a silver lining to this, it’s that sadness is a reflective emotion. It can be used to reflect on what was lost in the workplace. It can help you in identifying what was good and give ideas on how to recreate what went well. 

Anger over how people have been treated

Frustration and anger may be symptoms of burnout, but it is in the absence of equity that anger grows powerful and destructive. With emotions across the board at this time, anger can be particularly destructive now. If the redundancy process was not done well, people might be ready to tear things down. 

Trust, a hard to win resource, can be lost easily to anger. From an employer brand point of view, there’s another reason to avoid anger as well. On their way out the door, former employees may leave bad reviews on Glassdoor and other job-related platforms. When the pandemic ends, and businesses begin hiring again, those negative reviews may cause future employees to reconsider working at your firm.

Let go of people fairly

The key is in fairness. 

One of the Five Ways to Happiness at Work is “be fair,” because fairness is foundational to our emotional health. Fairness is comprised of two parts: distributional fairness (the outcome) and procedural fairness (how the outcome was achieved). This vital distinction helps us understand how people process what they perceive as fair or unfair. 

The outcome of a decision is often less important than the conditions that led to the outcome. Psychological studies show we are more likely to accept a decision they don’t agree with if they think the decision-making process was fair. 

When deciding to let someone go, consider how the decision is going to make people feel. Does it seem fair? What are the rules around who has to be let go? Do the cuts affect the shop floor as well as management? To help with equity, the UK has a great framework from the ACAS that helps employers make sure that their decisions are fair.

Being honest and transparent in these circumstances helps with how employees perceive fairness in your organization. Here are some steps you could take to make redundancies fair:

  • Explain the challenges the organization is facing 
  • State what you are planning to do
  • Explain why you have approached it the way you have
  • Sketch out a vision for how you can move on

Providing clear answers give your actions context and meaning, and ultimately fairness. If the decision-making process appears to be deliberate and fair, your decisions will be much easier to accept by the survivors. 

Are you thinking about your people? 

Consider the story of Dan Ariely. As a 17-year-old, Ariely was in a horrendous accident that left 70% of his body covered in third-degree burns. In the following months of recovery, his bandages needed changing every day. Some nurses would rip off the dressings all at once without a break — an excruciating but fast process. Other nurses would take the time to go slowly — making the process longer but less painful.  

The difference in technique related to how the nurses viewed pain. The ones that removed the bandages quickly were managing their own pain, whereas the nurses that removed slowly were managing his pain. 
This story brings up the question, “Are you sparing yourself pain, or are you thinking about your people?” Redundancies will cause increased workload for others and impact morale. Be mindful of how survivors are coping and support them in their challenges.

Why you need to take care of your leaders

At the heart of this all, are the humans (yourself included) that need to make the decisions. We wrestle with the consequences of our decisions. Some of the strongest emotions that leaders feel are guilt and shame. Recognizing the difference between these two emotions can help leaders move on from their decisions. 

Guilt is a feeling of responsibility or remorse for some offense, whether real or imagined. Shame is the painful feeling arising from the consciousness of something dishonorable or improper done by oneself or another. The distinction between these two emotions can be illustrated well in the workplace context through fairness. 

Did you arrive at the decision through a proper process? If yes, then there may be room for regret and remorse, but there is no reason for shame. If the decisions were made because it happened to be a convenient time to clean house, then there might be some cause for shame. 

What leaders can do to take care of themselves

Before helping others, leaders need to take care of themselves. 

Talk to someone

It’s critical to have a place where you can vent, release tension and deal with your worries. Find someone safe to talk to that’s outside your organization. Maybe it’s a mentor figure or a peer. The outside point of view will help with your perspective.

Talk to your executive team 

Letting someone go is not an easy decision, and it shouldn’t be a decision that you make in a vacuum. Talk to your executive team. Share the frustrations and the pain.

Focus on your wellbeing

The best way to deal with uncertainty is to take care of yourself. While there’s a time and place to indulge in some comfort food, it’s best to eat healthily, get regular exercise, practice meditation and get lots of sleep. As a leader, you may be taking on a lot of agitation and emotional burdens. You can’t help others if you’re about to fall apart yourself.

How Friday Pulse Can Help

I know how hard it can be to make layoff decisions. When people are laid off, they leave behind holes in the organization and their teams. It’s incredibly important to check with your people and see how they are coping in their absence. The Friday Pulse platform makes it easy to see how teams are faring and make changes in real-time. 

To find out more on how Friday Pulse can help and support your organization through the continuing pandemic please contact my colleague Clive Steer at [email protected].