Layoffs as a last resort

Research from the Society for Human Resource Management shows that most organizations do whatever they can to avoid layoffs.

These corporations resort to layoffs only after other budget-cutting measures fail to be enough, according to the SHRM 2001 Layoffs and Job Security Survey.

"Layoffs are disrupting and difficult for everyone and most organizations are taking steps to avoid them if possible," said CEO Helen Drinan, president and CEO of SHRM ( Based on the responses of 572 human resource professionals, the survey identifies the top four steps taken prior to layoffs:

* Attrition (63%).

* Hiring freeze (49%).

* Not renewing contract workers (21%).

* Encouraging employees to take vacations (20%).

If these steps weren't enough to stave off layoffs, most companies tried to remain sensitive to downsized employees.

Nearly half (41%) had a one-on-one discussion with the employee that included the manager and a HR representative. Another 20% of organizations announced layoffs through group meetings, while 5% delivered the bad news in the form of a written notice.

Most of the laid-off employees (80%) received some form of severance package. Of companies that offered one, 95% paid for unused vacation time; 73% included a continuation of pay for a certain period of time and 43% provided outplacement services.

However, the SHRM results show companies could reduce the toll on remaining employees. "It appears that most organizations are missing an important opportunity; they could and should do more to boost morale for employees remaining with the organization to stem further turnover and to increase productivity," Drinan said.

Some of the negative consequences of layoffs included increased gossip (54%), decreased morale (58%) and loyalty (41%) plus a rise in resignations (27%). To fight these effects and reduce workplace stress, just over half of the respondents said they tried to enhance communication with employees.

SHRM members may access the survey online for free from the SHRM Web site and the cost for non-members is $149.95.

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