Shawnee Love   •  
March 25, 2015

Except in industries where it is the norm, I believe layoffs should be a last resort in a downturn.  I know that is an unpopular opinion in boardrooms, banks, accounting offices, and stock brokers, but I come to the opinion honestly.

In my experience, the long term soft costs of layoffs far outweigh the short term savings most companies might reap from doing layoffs.

However, this is not an article about costs of layoffs. I have done those before.  I have also blogged about a company that avoided layoffs and is better for it. Spider Agile is still going strong today.

This is a blog about the decision making process when doing layoffs, because when I get calls for these situations, I sometimes hear managers discussing layoff strategy like they would warehouse turnover:  LIFO (Last In First Out) and FIFO (First In First Out) get bandied about as if the decision to layoff is solely based on seniority or the cost of wages.  In practice, there are so many more important considerations including:

• Positive internal influence (who is respected by the most people and would use their influence positively?),
• Friendship (who is friendly with key individuals we want to keep happy?),
• Social (who participates in or organizes the social activities?),
• Knowledge (who is a resource library that others go to?),
• Results (who can get things done, no matter what?),
• Succession (who has the potential to step up when you need them?),
• Maturity (who knows how “business” works and reacts thoughtfully to the news?),
• Resilience (who can take the misfortune of layoffs and get back to work in short order?).

This is not a complete list I am sure, just a few of the “soft” issues I ask clients to consider.  Usually, after they have done so, I hope they are also reconsidering the need to do layoffs.