For Startups: A Guide To Supporting Employees After a Layoff

Image by Cecye Young via Instagram

When circumstances push you to conduct layoffs, your responsibility doesn’t end with giving someone notice. While it’s only a legal requirement in some cases, providing outplacement support is a business necessity from a variety of perspectives. A thoughtful approach to layoffs includes outplacement support, it not only maintains your employer brand in the market but also is a way for you to live your values.

Big companies would likely hire an outplacement support agency to support employees from layoff to their next role, but this is usually not necessary in a startup environment. Thankfully, the structure of outplacement support is not difficult to emulate.

If you’re a startup leader concerned about layoffs — or perhaps you just did them — here’s a primer on outplacement support and a few cost-effective ways to do it.

PS — Read this and still need help? Bloom’s here for you. Book a no-obligation intro call with us to ask more questions and learn how we can help you out as much, or as little, as you need. Book a call with me, Avery, here.

What is outplacement support?

Outplacement support provides a bridge for employees between working at your organization and finding their next step. It’s recognition that you can no longer keep the employee on payroll, but you aren’t prejudiced against them as they look for their next step.

On the company side, outplacement support protects your employment brand and offers some cover against potential lawsuits for wrongful termination. As some companies use market crises as a reason to layoff employees they wanted to fire anyway, providing adequate outplacement support mitigates the risks of a disgruntled former employee having legal grounds against you.

There are three typical elements of outplacement support:

  1. Financial resources to help people make ends meet.
  2. Informational resources to help people make decisions.
  3. Educational resources to help people on their career path.

The good news, especially for lean startups, is that outplacement support doesn’t always require spending more money in order to be effective.

Art by Javier Jaen via Instagram

How startups can do outplacement support

As you kickoff your outplacement support, look at providing these minimum requirements and enact as many best practices as you can. Most don’t cost money — only time and effort.

Minimum requirements

A clear, written document with all pertinent details of the layoff: Full [legal] name of the employee, tenure length at the company, reasons for layoff, and all financial compensation they are owed and / or being given.

A reference letter: We recommend temporarily lifting any “no reference letter” policy for layoffs and providing a general letter of reference to all laid off employees. Believe it or not, some companies still have this as a policy. This letter should clearly state that the layoff was market-driven and you’d recommend them for employment at another company, but it doesn’t have to be a gushing letter of endorsement. Provide this in the employees’ layoff package, allowing them to use it while they search for their next role.

Access to job-searching resources: Whether a document outlining key places to find job opportunities, information on job fairs coming up, or connections to a recruiting agency, give laid off employees as much information as you can about finding their next role.

Have a list of all individuals affected by the layoffs to share with other recruiters: Make sure you ask people, on the day of the layoff, whether they want to be on this list before you publish. State clearly that if you don’t hear back by the following day, you will assume they don’t consent and you won’t include them on the list. Remember, not everyone wants to be on a public list.

Offer 1:1’s with the employee’s former manager for career goal conversations: This conversation is not an exit interview. Instead, it’s a time for the manager to share what they saw as the individual’s strengths and provide insight on what roles they might be suited to. Make this optional, as not every person will want to talk with a former manager.

Respect privacy after a layoff: Not everyone who was laid off will want to hear from their former employees right away. Make it clear, to both laid off individuals and remaining employees, that all remaining employees should give people space. That means they shouldn’t reach out to anyone laid off for a short period of time (usually a week) unless an individual who was laid off reaches out first.

Source: layoffs.fyi

Example: Eventbrite, the ticketing and events website, laid off 45% of its employees (500 people). We’ve now come across a second opt-in list of employees laid off.

Best practices

If you have some budget or are willing to do a bit more for your team, look at these best practices.

  • Extend health and other benefits longer than the period of employment: Offering to extend health benefits for a period of 1–6 months after employment will give employees peace of mind while they search for their next role.
  • Hire a career coach to work with laid off employees on career goals: This gives them professional support as they navigate what kind of role they are suited to. We recommend Rebecca Perrin (she’s the best!) for this.
  • Hire a grief counselor: Being laid off, especially in a market crash, is an incredibly stressful time. Your former employees may want professional help, and you can provide that to them in the near-term.
  • Spend your social capital to secure interviews for laid off individuals: Make recommendations, introductions, and talk up your former employees to get them more visibility and interview opportunities.

What not to do

Outplacement support is about the person laid off, not the company. So make sure your efforts focus on the individual and you avoid these potential errors:

  • Never talk about the layoffs before they happen: The worst thing for an employee is to figure out they are being laid off from a friend or the media. Seems like a no brainer but this has happened within the last couple of weeks and it’s not okay. The only exception here is privately talking to a trusted advisor or consultant to get advice.
  • Don’t publish a list of everyone laid off without their consent: Not everyone wants to be on a public list.
  • Don’t assume a market crash is air-cover to lay off anyone you want: Even with severance pay, you open yourself up to risks depending on how you enticed an employee to join (be specifically careful about anyone you headhunted and then laid off within their first year).
  • Don’t assume every person gets the same treatment: As the rule of thumb goes: take your salary, divide it by 10, and that’s how many months it takes for that individual to find another role of similar stature and pay. You’ll need to provide extended or additional support for more senior individuals.
  • Don’t try to make it better: Layoffs are hard across the board but they can feel even more devastating when you try to make it better with false promises and things like “consider this a fresh start” or “you’re so talented — you’ll land on your feet”. Remember, while it’s tough for you as a leader to conduct a layoff, those employees are losing their livelihood, rituals, a social circle, and seeing their career future put into jeopardy. Let this be about them and hold space for them to feel what they feel without forcing your game time pep talk on them. This is called empathy and in situations like this empathy will offer that extra support the impacted employee needs.
Brené Brown on Empathy via YouTube

Support isn’t weakness

Startups thrive on collaboration, heart, and in many cases seeing your colleagues grow. So when layoffs happen, all employees — current and former — deserve to be treated with care. While a company downsizing and people losing their jobs is a fundamentally sad experience, the way you go about supporting people after a layoff sends a massive signal about what kind of leader, company and employer you are.

If layoffs are necessary for the survival of the company, then they need to be done. But realize that high-quality outplacement support strategy is a required next step to ensure that the company you’re saving now doesn’t struggle to hire great people later on. Whether it’s former employees taking to twitter about their poor experience (trust me it happens) or remaining employees becoming disengaged after seeing the treatment their former colleagues got, you can avoid it with genuine outplacement support.

Keep blooming,

Avery

One more thing At Bloom, we support companies who aren’t ready to hire a full-time HR or Talent but need the leadership on an interim basis. We do the nitty-gritty foundational work like implementing the best tech, tools and processes that are infused with your org’s values. Read this article and still need help? Bloom’s here for you. Book a no-obligation intro call with us to ask more questions and learn how we can help you out as much, or as little, as you need. Book a call with me, Avery, here.

We help startups and the people who work at them grow.

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