Firing good working becasue of a slowdown in the market

We are a very small company in Arizona that has been in business for less then 6 months. Unfortunatly we hired too many people, and will need to fire 2 employees becasue of a downturn in the mortgage industry.

What do I tell these employee's as this will be the firt time I have had to fire someone for no fault of thier own.

The two young ladies do great work, but there is no way for us to continue paying them the 6,000 a month they earn collectivly.

Please let me know any suggestions to make this easier on me, as I have to do it Friday.

Comments

  • 12 Comments sorted by Votes Date Added
  • First advice is that you not consider this firing someone. I know, semantics. But often it is necessary to employ a Reduction In Force (RIF) and that's what you contemplate. How do arrive at your decision that these particular two ladies are the ones to go? In a RIF, you first must arrive at a defensible procedural statement as to how and who and on what basis you will put the RIF in motion. All things being equal, and they rarely are, the last two to come on board might be laid off. Let us know more about your selection process for these two and why two, not five?
  • There is no easy way to let someone go. Please don't think of it as 'firing' them which most people think of as employee caused. It seems that this is more of a 'lay off' due to lack of work.

    The big difference in most states is the eligibility to collect unemployment. If the employees are great workers but you no longer have work for them, they should be able to collect.

    One thing that bothers me is the Friday date. I try to NEVER let someone go on Friday. They have all weekend to brood about it. If you let them go earlier in the week they can sign up at job services, begin searching for new employment, etc. the next day.

    Talk to them individually in a private location, such as a quiet office. Have someone else present, such as a manager or HR representative. Do not have more than two company reps in the room as more can be overwhelming for the employee.

    Be as calm as you can. Say someting like, "Unfortunately, due to the downturn in the mortgage business the company cannot continue to employ you. Your last day of work will be ... and you will be paid severance through .... You might be eligible for unemployment and I would suggest you register with the local unemployment office. Their number is listed on this information which we will now go over."

    You should have a "checklist" that tells how each employee benefit will be handled. Give the employee any information they need to continue benefits, such as COBRA letter (mail one also) or phone numbers to call to continue life insurance.

    Then collect any items you need from the employee, such as keys, cell phones, lap top computers, employee handbooks, etc. Explain the company's policy on confidentiality, references and any other pertinent information. These should also be listed on the checklist. Ask the employee to sign that you have discussed these items. Give the employee a copy of this sheet and keep the original for your file. I also give the employee a letter or memo stating that their employment is terminated effective (date) for the following reason (layoff). They can take this to the unemployment office.

    Allow the employee time to cry, get angry, etc. and re-compose herself. Ask if she wants to take her personal belongings with her or to stop back in a few days to pick them up in your office. If you don't have any reason to believe the employee will damage company equipment or files, just have a supervisor or manager in the general vacinity of the desk when they are taking their personal belongings. Otherwise, you can escort them to their desk and offer to help carry things to the door while they bring their car around. (Provide boxes)

    Good luck. Remember that you have to do what's right for the company. Been there, done that, and it ain't easy!

  • Both Don and HR Banker know what they are talking about. HRbanker did an excellent job laying out a process that would serve you well to follow.

    I find it good practice to get right to the bad news, but do not leave the impression that it is up for discussion. There are some other threads that discuss this and can give you additional information if you have time to do a bit of research. If not, just follow the path laid out above.
  • The reason these two were chosen is they have very little responsibilty for our sucess. They are two customer service reps, that have very little work to do these days. I have had to make projects up for them to do in the last three weeks, and I am running out of new project to invent.

    After reading that Friday was a bad idea I will do this on Thursday, but pay them for the full week ending friday. The reason I was going to do it Friday is I wanted them to be paid for the whole week.

    I did not even think having someone else in the room was needed until I read this so thank you.

    I must say I have a lump in my throught at this time, becasue I feel like crap. I was hoping that this would not have to happen, and have gone to great lenths to try and avoid it.


  • Ketel; there are very few rules when it comes to what the company can do. Why not give them their normal pay for the rest of the month plus an extra month? You can be comforted by the fact that the two KNOW business is slow and they won't be that surprised by the company's decision. People understand the truth. You must now struggle to be sure you do not let emotions into the discussion. Save that for later, if you must display that. One other thing I always say about these types of separation conversations....You never, ever, absolutely never can predict how one will go. The one you think will go ballistic will be the one who winds up comforting you and is the most docile. The one you think will sull up and cry and be speechless, will be the one who will go ballistic and curse you. It's nothing personal, ever. People must be allowed to have their emotions. Your objective is to control your own and keep it business. It's often said that when it gets easy, it's time to find something else. Best of luck.
  • Thanks alot.. this is gonna be a hard thing to do, but this message board has helped alot!
  • Reduction in force is not an easy part of the job. The suggestions you have been given are on target. I have been involved in several RIF's and "reorganizations" and office closings. One phrase that this is a "business decision and doesn't in any way reflect on you or your work product". Say just what Ray suggested and make it short and sweet. If you have been "creating work" they probably have an idea that this could happen, even if they don't admit it.
    One suggestion that we have found that works well is to have the GM and Supv/Manager talk with them (2 people in room) and just let them know. Then we have HR person in an office for them to see next. This gives them time to "cry and vent' without doing it to the managers and sometimes embarrassing themselves. I have a written explanation of all of their benefits (insurance, vacation, retirement, unemployment, checks, etc.) and we go through this if they want. If not, they sit there for a few mintues and then take the letter and leave. We also have a few boxes ready for them so they don't have to go out and find them and have the Mgr/Supv ready to help them take things to their car. If they start to visit people, we ask politely that they go head and leave so not to cause disruption.
    When it is all over, we have a meeting with all the employees explaining that we have had to reduce force because (whatever) and hope that this is all. Again empasizing that this is a business decision. Make it short and sweet and give them a chance to ask questions if they want. (Good way to eliminate rumors and insecurity.) Good luck and relax this weekend.
    E Wart
  • Ketel:
    For one who has just lived through this recently (on the receiving side), there really isn't a good way, but the suggestions given are 'better' ways. Also, most time when a layoff is necessary, the staff has an inkling that it is coming. My company had been laying off for 6 months, one at a time, in hopes that business would pick up. I was the 3rd to go, it was still a surprise because I thought other departments would be hit first, not a "backbone" administrative department. As I understand it from former co-workers, they almost didn't get paid the first period I was gone, the director hand cut checks that were identical to the last net pay and said he was going to figure it out later. So, although I was surprised it was me, I was not surprised that another person had to go, so perhaps your workers already have the feeling of what's up. The first 2 people we laid off knew who was going to be the first to go.

    Don's suggestion of additional pay is nice. I was told on a Friday morning, basically to pack up and go, and I received 2 weeks additional pay. Fridays are not good because you do have the whole weekend to brood about it. But, with the computer age, I made my UC claim online on Saturday and got credit for filing that week. I had my updated resume (which I actually did on Friday before I left work) and submitted a few over the weekend by email.

    I worked for a small company so trust was big, I worked that Friday a half a day just trying to unlock computer files, change passwords, label filing cabinets etc. It's been 4 weeks now and I am still taking calls from them and helping out. The director didn't even stay in the office, he went to our other site. So, there was a potential for mischief on my part. I wouldn't recommend doing it in the way he did. I agree with 'watching over' someone, you never know, why give anyone the opportunity.
  • I think you may also want to bring up during the separation conversation the importance of leaving on good terms and in a professional manner. Since the separation is due to lack of work and not to performance issues, these employees may be eligible for rehire when business picks up.

    Although there are different theories on whether or not it is a good idea to bring people back, I think if there is no performance issues and nothing else prevents you from doing it (severance agreements, etc.), you will not have any hiring costs if you brought them back later (if they are still available). No need to make promises but if it is a strong possibility, why not to mention it, always adding "per business conditions".

    My main point is that by mentioning the importance to remain professional you set a bar high and help the employee to go through this most hurtful time.

    Also, if they are good employees, you may sweeten the pill by offering to provide personal reference. In this day and age where people try to cut it one and for all, some humanity would not hurt. Especially, in a small starting company.

    My $.02-worth.

    Alex
  • Ketel,
    All good advice, HRBanker really hit a home run with his post. Hats off to you. Been on both ends..............sucks both ways. When I was laid off at my last job it was handled very appropriately, I was not at all angry. Funny thing is my wife was incredibly angry! They did it on a Wednesday and said I could go then if I wanted, also given two weeks in lieu of notice pay. I had people working under me and many projects that were rolling so I chose to stay until Friday. Can't say I worked alot on Friday, but I did get things lined out and handed off on Thursday to my co-workers.
    Glad to here you feel like crap letting go two good workers.........if you didn't I would be concerned.
    My $0.02 worth.
    DJ The Balloonman
  • Thanks for the kind words. Unfortunately, practice makes perfect. I forgot to add that the last step I usually take when I've had to let someone go is to stop by the local tavern with my hubby and have a couple of drinks. Sometimes it helps, sometimes it doesn't.
  • It went as well as can be expected, but I still felt horrible afterwards. thanks for the advice it really did help me!
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