When an employee leaves, proactively help them find their next job. The faster they find a new job the less likely they are to get into a desperate situation and to do something that is against your best interest.
Firing someone sucks. Every situation is different, stressful, and unpleasant. For many small businesses, a decision to lay someone off often comes after weeks or months of deliberation, and after looking at all possible alternatives.
Even if you give a good severance package and a letter of reference, it’s sometimes not enough. I believe that a business’ responsibility to the employee isn’t done until they find their next job or career. When an employee leaves, the business should proactively help the ex-employee find their next job.
Here are some specific business reasons why it might be a good idea to go above and beyond to help an ex-employee land on their feet:
- Build goodwill for future opportunities: Your past employees will have a more positive attitude towards you and your business if they feel that you genuinely did your best to help them. They are less likely to hold a grudge and more likely to help you in the future when an opportunity presents itself.
- Strengthen relationships with current employees: Current employees will look to how you treat your past employees as an indication of how they will be treated when they leave.
- Reduced risk of harm to the business: The faster a past employee finds a new job, the less likely they are to get into a desperate financial situation, and the less likely they are to do something for financial gain that is against your best interest, or that violates an NDA or non-compete.
If you are a business owner and are laying someone off, consider going the extra mile to help that employee find their next job — I think it will have long term benefits for your business.
A few years ago we offered our employees the option to work 20% less in exchange for a 10% pay-cut. The results and reactions surprised us.
A few years ago Fresh Air Educators performed an HR experiment: We offered all our full time salaried employees the option to pick between 2 work schedules:
- Status quo: 5 days @ 7.5hrs at current pay
- 4-day work week: 4 days @ 7.5hrs – Every Friday off
Work 20% less but take a 10% pay cut
For me, this seemed like a no-brainer:
Very Little Change to Take-Home Pay
The 10% of salary that was being given up would have been taxed at highest tax rate if it was earned (in Canada). So the net “take-home” amount was probably closer to 95% of what the employee was making previously.
Better Hourly Pay
Employees would now be getting 90% of their salary for only 80% of the work, so the pre-tax hourly wage was higher.
Happier, more rested, more productive
The 4 day work week gives employees a long weekend every weekend. That’s 52 extra days off a year.
Obvious Employee Perk
Offering a 4 day work-week is an obvious perk which should make it easier to hire top talent, and should lead to less employee turnover.
Cost Savings for the Business
The 10% salary savings for the business goes directly towards profits.
Very Little Productivity Loss
Working 20% less DOES NOT mean 20% less productivity. The 80/20 rule kicks in: The most important things still get done while the 20% dropped will be the least important things (which probably only account for 5% of weekly productivity). By only working 80% of the time, you will still reap 95% of value.
Negatives: No Work Gets Done on Friday
The only negatives seemed to be that no work would get done on Friday. This was an issue for departments such as Customer Service, but most of those employees were hourly and already working non-standard work hours.
Employee Reactions to the Proposal
I was extremely surprised that we had almost zero adoption of the 4-day work week. A few employees tried it for a few months during the summer, but everyone eventually switched back to the 5 day work week.
Ultimately it seemed that:
- Many of our employees were living paycheck to paycheck, and the reduced income simply wasn’t feasible for them.
- Some employees were suspicious that this was some long-term scheme to permanently reduce their salaries
- Some employees thought that they would be forced to make up the 20% of missing time for free.
So in the end, I am sad to say that this experiment was a failure, and we cancelled the program 12 months after starting it due to non-adoption. (However, I still believe in it, and I think I will try to implement this from the get-go in my next startup)