Managing Employee RIF Expectations Under the Corona Virus (COVID-19)

Corona Virus

We are about to see a level of angst in the workforce that we haven’t seen since the great recession of 2007, over the threat of losing one’s employment due to economic uncertainty. However, contrary to 2007 when the slowdown came at a slow pace, today’s concerns over the COVID-19 implications hold a sense of urgency.

This is partly due to the immediate impact we’ve seen in other economies like China, the precipitous down spiral of the stock market at the end of February, and the all too recent memory of the great recession.

According to the Organization for Economic Cooperation and Development, global economic growth could plummet to just 1.5 percent in 2020, far less than the 3 percent it projected before the virus surfaced, should the outbreak sweep through the Asia-Pacific region, Europe and North America. We also saw in early March, the US Central Bank slashed interest rates and how global economies have as well.

However, the potential of physical harm due to this pandemic, compounded with past news of other recent viral outbreaks like SARS and MERS, make people reasonably stressed; and even if there’s no clarity around the actual impact COVID-19 will have in the USA, the trends from other countries show that it gets a lot worse before it gets better.

As leaders of organizations, we need to get ahead of this issue, and simply not wait until employee anguish reaches critical levels. It seems counter intuitive because our initial reaction is to primarily address the health considerations in the workplace. However, not managing it, will not make it go away.

I can remember a situation, years ago, where a pharmaceutical manufacturing facility failed to address employee angst over potential layoffs. The issue went without discussion until a batch of raw materials became contaminated and had to be discarded. The cost was over $250,000 and the market value of the finished product, a lot higher. Even so, it was a better outcome than if an actual damaged medication had gone to market and harmed people.

So, what to do? While there’s no exact answer for everyone, here are some suggestions you can use as a starting point,

1. Discuss: Members of your management should ask employees to share with them any concerns they have over the Corona Virus threat. There will be concerns over health-related issues but the other elephant in the room will be “what happens to me” if the economy tanks. Make sure this is also addressed.

2. Acknowledge: Be clear about the need to make contingencies and the fact that you don’t have all the answers. Employees appreciate transparency and saying “I don’t know but let me research that and get back to you” is a great response.

3. Offer: Remind them of any support options you have for them in case of a layoff, such as outplacement services and employee assistance programs (EAP’s). Make sure these agreements are in place and understand how to activate them…don’t wait until the last minute.

 4. Anticipate: Think about the potential reactions from your staff and put together a list of responses that your management team can use so that there’s consistency in messaging. This is very important as mixed signals will only cause more concern.

5. Understand: Be clear about your company HR policies regarding the management of separations. Be sure not to misrepresent anything and train your management team on this.

While the issues regarding potential layoffs are beginning to occupy the minds of workers, you may also have more immediate concerns regarding how you handle them. The Centers for Disease Control (CDC) has developed an Interim Guidance for Employers on COVID-19, as well the World Health Organization’s (WHO) guidelines.

However, don’t assume dealing with the specter of layoffs is not as pertinent. Sometimes the things we don’t address become our worst nightmares.

Robert Newland is CEO of Newland Associates, an organization he founded in 1991, and an equity owner of Career Partners International (CPI). Over the years he has been involved in many local, national and international projects, including C-Suite Executive Search, talent management and leadership development across a broad set of industries. He sits on the Board of Directors of CPI, one of the largest providers of executive coaching & outplacement services in the world with over 300 locations. To contact Robert, write to info@newlandcpi.com .

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