Article Features Web Exclusive Jim Schutz

Workforce Reductions: 10 Steps to Making Layoffs in Local Government More Gracefully

Jim Schutz is assistant city manager for the City of San Rafael and can be reached at

Layoffs. Pink slips. Reduction in force. By any name, layoffs conjure up about as many positive feelings as tax audits or oral surgery. Unfortunately local officials are in the middle of a long season of layoffs in local government, which is not something we typically do and not something we are even sure one can be good at.

Adding to the dilemma in local government is that we often think of our co-workers as a big family — our work family. There are favorites, misbehavers, tough ones, loud ones, gossipy ones and everything in between.

As dysfunctional as a real family may be, though, they always remain your family. But a work family is different. The need to lay off employees for economic reasons isn’t pleasant and can be gut-wrenching for all concerned. But here are 10 things you can do to get through it with more grace.

1. Recognize you are not alone.

If you are the final decision-maker, you may feel you are all alone. But there are many people like you dealing with the same fiscal problems. Cities throughout California are grappling with severe fiscal hardship. The current economic climate has forced them to lay off police, firefighters and other staff, furlough employees, slash programs and reduce services.

2. Seek counsel from your city attorney.

You have the green light to proceed with layoffs as long as you have mastered the topic in terms of state law, federal law and a host of state and federal court decisions. You need to know details about the Worker Adjustment and Retraining Notification Act (WARN), Older Workers Benefit Protection Act (OWBPA), Meyers-Milias-Brown Act (MMBA) and many others. If those aren’t part of your background, plan on some spending some quality time with your city attorney.

3. Study the local rules.

Reread everything in your bargaining unit contracts and also your personnel rules and regulations on the subject of reduction in force. While local governments can typically make the decision to lay off employees due to a lack of funds or work, the effects of those layoffs are commonly negotiable along with some of the process. How much notice, the layoff order, bumping rights, transfer rights, re-employment and retraining can most often be negotiated.

4. Write a layoff plan.

According to Rick Bolanos, partner at Liebert Cassidy Whitmore, it is critically important to have a detailed plan before starting the layoff process. While the decision to impose layoffs is not subject to bargaining, Bolanos cautions, “It will be harder for the agency to assert its management rights if the plan is incomplete or lacks credibility.” Bolanos suggests making clear the cost savings and operational needs.

Because the bargaining unit has the right to meet and confer on the impacts of the layoff, it will be harder for them to do so if the layoff information is not readily available and clear. Transparency in the process also increases trust and reduces anxiety.

5. Recognize that it’s the economy — it’s not personal.

It is important to make clear that the layoffs are about fiscal conditions and not an individual’s performance or discipline. Those topics raise other legal issues. Bolanos warns, “Different legal rules apply. It is best not to confuse performance-based considerations with more general economic reasons for eliminating job classifications.” Having sound economic support for the layoff decision will help keep the distinction clear.

6. Consider the pace of the process.

Schoolteachers in California ride an annual roller coaster that involves preliminary layoff notices, waiting for more news, subsequent rescission of some notices and uncertainty at every hair-raising turn. State Schools Chief Jack O’Connell has said the flood of pink slips discourages people from entering the teaching profession. So is early notice always bad?

Not necessarily. The City of Santa Rosa recently took a slower approach by giving employees and bargaining units several months of advance notice. This allowed time to bargain on other reductions that resulted in saving jobs. Alternatively, some organizations worry about the psychological drag when decisions are not made swiftly enough. In the end, it is important to weigh the consequences of a sprint versus a marathon based on your organizational culture.

7. Be consistent.

When it comes to the rules, process and employee options in a layoff, most people would likely agree that the need for consistency is very clear. However, the reality is sometimes muddier. For example, consider how to deal with the lag time between a layoff notice and the employee’s last day. An employee asked to leave immediately may feel rushed or not trusted, while staying too long can create an uncomfortable lame duck period.

For example, let’s say the following positions will be laid off for economic reasons. Employee A is an outstanding employee with many positive relationships with colleagues. Employee B has had numerous behavioral flare-ups and exhibited some abusive behavior. You may be fine with “A” working until the layoff takes effect, but you may want to put “B” on paid administrative leave.

Without any definitive procedures in the memoranda of understanding (MOUs) or personnel policies, attorney Dania Torres Wong of Renne Sloan Holtzman Sakai suggests basing the decision on an objective business necessity to avoid treating people differently. It is better to have a set, legitimate and mutually understood procedure, even if that procedure allows some flexibility.

8. Deliver the message well.

With all of the anxiety around layoffs, perhaps the most difficult moment is letting the employees know they will be laid off. That is where the personal impacts of a nonpersonal decision hit home. It is best to have the human resources director and/or a senior manager deliver the news, because the responsibility is too important to shift to someone else.

The focus should be treating the employee with dignity, respect and honesty. Create a checklist ahead of time to guide you. Items could include: reviewing the written notice with the employee, providing background on why the layoff is necessary, communicating the next steps and timeframes, explaining benefits and final salary payout, and providing resources to assist them moving forward.

9. Ease the transition.

Employers can ease the transition by being open to the grieving process, guiding employees to employee assistance programs and bringing the remaining employees together to talk about the future.

When possible, a layoff severance package is a welcome tool to aid in the transition. Typical programs include some amount of additional compensation, an extension of health/dental benefits and outplacement services to help the individual find new employment.

10. Remember the Golden Rule.

Perhaps it is all just as simple as following the Golden Rule: Do unto others as you would have others do unto you. If you were the one being laid off, what would you regard as a fair and respectful process? The steps listed here should be considered, and your organization’s specific work culture and operational needs must be taken into account. With some thought, care and thorough preparation, your city can get through this process with grace.

This article appears in the November 2009 issue of Western City
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