NEW YORK -- It's something small-business owners dread: having to tell employees they're being laid off.
It's inescapable in a weak economy, or as a company changes the way it does business, that some workers must be let go. There's probably no way for a company owner to blunt the pain, but being honest, direct and showing some concern when breaking the news may help the employees and the co-workers they leave behind as they recover from the blow.
Before you meet with a staffer you plan to lay off, carefully plan what you're going to do and say. First, you need to be aware of possible legal complications.
"You should always contact an attorney," said Leigh Branham, owner of Keeping The People Inc., an Overland Park, Kan., human resources consulting firm. A lawyer will help you look out for pitfalls that could land you in litigation -- for example, if you intend to lay someone off right before the date she would be vested for retirement benefits.
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Bob Burbidge, founder of Genesis Consolidated Services Inc., a Burlington, Mass.-based provider of human resources outsourcing, warns that if you lay off a worker who is in a class protected by labor laws -- such as minorities, women, the disabled and people over age 40 -- but you decide to fill the job soon after with someone else, you could be opening yourself up to a discrimination lawsuit.
Branham advises laying off workers on a Monday or a Tuesday, and definitely not on a Friday. "If you do it on Friday, people will stew in their own poisons over the weekend, without anyone to counsel them on how to handle it," Branham said. If they get the news early in the week, they can start meeting with outplacement advisers, if the company provides this service, or otherwise get some help in moving forward.
Hurtful as the news is, it should be delivered in a straightforward manner.
"You need to explain to an individual the reasons why -- if the company has financial hardship, because they lost some big client," said Patty Hilger, vice president of human resources and operations for Genesis. "You have to be really direct. I've sat in some of these meetings where the business owner wants to be so careful. At the end, the employee didn't know they didn't have a job."
At the same time, Branham said, "You don't want them to go away feeling worthless. You hired them, recognized they had strengths. Acknowledge them when they go."
Always keep the meeting private, and try to have another manager with you as you deliver the news.
HR professionals say you never should tell an employee he's being laid off if he really should be fired for cause. For one thing, you can end up paying for unemployment benefits. Second, if the worker is in a protected class and doesn't understand that he was fired, you could find yourself being sued for discrimination if you replace him.
If you can't offer outplacement services, you might refer a staffer to community services that will help him find another job. Consider offering a written recommendation that at the very least notes he was let go for reasons beyond his control.
And consider some kind of severance package. The paycheck laid-off staffers get Friday shouldn't be their last.