Jack Kelly/FORBES
Companies should review how and who they lay off. Curiously, the people usually impacted are the workers and never the CEO or members of the C-suite. The upper echelon is exempt from receiving a pink slip. Nor do they volunteer to take a pay cut, which could save many employees from getting the ax.
Instead of a knee-jerk reaction to lay off workers, corporate leadership should empathetically consider other ways to cut costs. Jettisoning expensive real estate and leases, allowing people to work remotely, cutting over-the-top ever-increasing stock grants to senior management should be done first before letting go employees.
Workers with 20-plus years of experience may be offered buyouts for early retirement. Pricey real estate can be sold off, or companies could let their leases expire and pivot to a remote-first policy.
If it's determined that layoffs are required, the rule should be that the C-suite and people earning more than $250k should be considered first. Instead of downsizing several people, only one executive will take the hit.
Just as companies put workers on performance improvement plans or stack rank them, executives must be held accountable to the same policies. Low-performing C-suite executives should not be immune to the vicissitudes of the marketplace and be earmarked for termination if they have not met the standards set for them. Not only do the senior-level professionals earn lush salaries, they are also highly compensated with stock options. Their separation from the payroll would save a fortune compared to the average worker.
It’s the management team that makes the decisions. If a company is placed in the position that it needs to downsize, the managers didn't do their jobs. If they don’t get axed, at the very least, they should be stripped of all the stock and other forms of remuneration they receive, which would save a lot of money.
By keeping employees when things go wrong, the company earns a reputation for being empathetic, loyal and employee-friendly. People will remember the bold decision to hold firm and keep everyone employed. Conversely, if workers are summarily dispatched without compassion, they’ll be seen as cold-hearted and untrustworthy.