Invest in offboarding strategies to minimize layoff trauma

Employees live in fear of being laid off, especially in times when the economy is struggling and companies are being forced to make cuts. But is there a way to conduct this process in a more seamless and trauma-free way?  

Thirty-eight percent of business leaders recently surveyed by ResumeBuilder think layoffs are likely in 2024. As a result, more than two in five U.S. employees are worried about losing their jobs, and nearly half say they have actively changed their behavior at work to avoid being laid off, according to a recent survey from Harris Poll and Justworks. 

"Layoffs are typically associated with negative perceptions and negative experiences," says Shawna Simcik, VP of leadership development at organizational consulting firm Keystone Partners. "Employers can do a very small thing to change that: They can choose to invest in employees while offboarding them, and shift that negative experience into a positive one." 

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It varies depending on the company, but the average cost to onboard a new hire is $4,700, according to data from SHRM, including equipment and training time. Meanwhile, offboarding costs $15,000 per employee, yet this process is often overlooked when discussing potential investments in business strategies. 

Career transition services — an employee-sponsored benefit for workers who have recently been laid off usually offered as part of a severance package — can be beneficial in both the long and short-term. Seventy-seven percent of employees who received this benefit felt losing their job was ultimately a positive experience, and were even 37% more likely to return to their former employer as a boomerang employee in the future, according to recent research from Keystone Partners. 

"We live in a different world today where lifelong employment no longer exists," Simcik says. "The psychological contract between employers and employees is different than it was 10 to 15 years ago, meaning that as leaders we need to think about the entire cycle of an employee with us because that employment is bound to end sometime." 

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While it may seem expensive to invest in additional offboarding benefits such as career coaching, job matching platforms and development classes, Simcik challenges employers to think of the possible return on those investments instead, not only for laid off workers, but for those who stay behind. Their survey found that 65% of employees who survived a layoff, but knew their laid off colleagues received career transition services, viewed their employer in a positive light.

Talking about inevitable job loss is uncomfortable, but Simcik urges companies to normalize the discussion of layoffs and to encourage employees to ask questions. Progressive employers will see the benefit of thinking about the full employee life cycle, even during its challenges.  

"The world of work that we're in is difficult to predict," Simcik says. "What you can control is how much you can give to your employees while they're with you. Ask yourself: Where can you take them during your time together — however short or however long that may be? How will you treat them while they're in your organization and when they leave?"