Pros and Cons of Keeping Laid-Off Employees to Ease the Transition

By: Laura Mohammad
November 10th, 2011

Since the second quarter of 2008, 4.3 million U.S. workers have been laid off in mass events, defined as laying more more than 50 people at a time by a single employer, according to the U.S. Bureau of Labor Statistics. Although layoffs in 2010′s third quarter were the lowest since the same period in 2007, it’s still a common occurrence, even as there are signs of improvement. Even though you may not have experienced the hardship of cutting loose good employees, you aren’t in the clear yet.

The question arises when you realize it’s time to restructure, cut costs or combine positions: Do you let your workers go immediately or do you keep them on for the sake of transition or to finish the work before the layoff event? There are pros and cons, depending on your organization’s needs. Institutional knowledge is a plus, while a toxic environment can dramatically impact the workflow. Before jumping into the decision, consider carefully the best plan of action for your firm.

Pros

• In a smooth transition, with possible training of employees by the outgoing workers, institutional knowledge can be a plus.”Knowledge of processes, procedures, unique customers, special situations and other information may be in someone’s head rather than documented, so this transition imparts critical knowledge,” says Lynne Sarikas, director of Northeastern University’s MBA Career Center.
• Keeping outgoing employees allows for time to document processes and procedures for future reference.
• When an employee is asked to stay on temporarily, it inspires confidence in the person who will be doing the job going forward and they will feel better prepared to step into their responsibilities, says Sarikas.
• By keeping an outgoing employee at least temporarily, you are showing respect for him; it is recognition of his knowledge and experience. It encourages a positive separation, which is to your advantage down the road, should you need to work with them again someday.
• It speaks positively to your organization when you treat your outgoing employees with dignity. Word gets around that you take care of your own, which is to your advantage when times are better and you can begin to rehire.

Cons

• A transition period for laid-off employees isn’t an option when the work is of a confidential or sensitive nature. In those cases, a clean, quick cut is best, says Sarikas.
• Sarikas says you need to consider whether the departing employee would attempt to sabotage your operations. Would they give wrong information to the new hire to make them look bad or to hurt the company?
• Sarikas says you need to ask yourself, will the person exhibit animosity or anger toward the person who will be doing the job going forward?
• Does this set the person up to start comparing their qualifications and skills to those who will be staying to do the job? Will they start arguing with the manager that the wrong decision was made?
• Ask yourself if the worker will be too angry or too emotional to effectively do the job, says Sarikas.
• There are times when the outgoing employee isn’t the best choice for training because he or she isn’t competent. In that case, it’s best to hand training off to someone else, and execute a clean cut with the laid-off worker.

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