With the economy continuing to tank and the holidays behind us, we can expect to see more layoffs. Some firms are letting people go with minimal notice, severance or outplacement assistance. What companies often do not realize is the impact that has on their organization and their surviving employees. In a survey conducted by Leadership IQ, a training and research firm, they found some sobering results. The company's survey of 4,172 workers who kept their jobs after a layoff found:

• 75% of layoff survivors say their productivity has declined while customer service has also declined
• 64% say the productivity of their colleagues has declined
• 77% say they see more errors and mistakes being made
• 61% say they believe their company's future prospects are worse
• 69% of surviving workers believe the quality of the company's products or services has declined

As might be expected from surviving workers who have witnesses a layoff, the majority said they have feelings of guilt, anger, and anxiety, perhaps explaining the decline in productivity and the finding that 87% were less likely to recommend their organization as a good place to work. Layoffs mean losing experienced workers, damaging the organization, and impacting future recovery.

Layoffs may be a necessary strategy for the survival of the organization. However, if it is, employers must do it carefully and after consultation with experts.

When layoffs become necessary, how you handle the affected employees and how you immediately respond to the remaining workforce will determine whether your workers remain productive and engaged. Managers erroneously believe that survivors are grateful that they have a job. Unfortunately that is not the case. Layoffs traumatize an organization and its workers.

Treat your laid off workers with respect and dignity. Take the time to explain why layoffs are necessary. Provide them with severance and outplacement assistance. Give them time to ask questions and to say goodbye. And unless you expect trouble, don't ask security to escort them to the door. When laid off workers are treated fairly, they are less likely to call an attorney.

As soon as the layoffs are over, talk to the survivors. Explain what happened and why. Answer their questions. Address all their concerns. Be honest and candid. Outline your turnaround plan. Delivering bad news without a plan merely adds to their anxiety.

Reassure your star performers. Let then know how important they are and why they are needed. Make them part of your recovery plan. Remember, good employees can always find jobs and recruiters will be targeting them at the first sign of a layoff.

During the days and weeks that follow the layoff, managers must be visible and accessible. Talk frequently to your survivors. Listen. Keep them focused.

Workers remain engaged when they are treated fairly and believe in their management.

Severance may sound like a dirty word in the workplace today, especially in the current economic slump. Employees do not want to think about losing their jobs and employers are hesitant to draw attention to the prospect of a reduction in staff. But having in place a well-crafted severance agreement can serve a company in good times and bad.

Read this comprehensive article, which originally appeared in Mainebiz.

I'd like to hear from you. Tell me what you'd like to see covered in this newsletter. Any burning issues? Not sure how to address an employee issue? Send your comments and questions to rick@dacri.com and put "Newsletter" in the subject line. I'll answer your questions and publish my response in an upcoming issue of the Dacri Report.

Rick Dacri