“Whom do I let go?” was the first comment my client made as we sat down to lunch. “How can I possibly choose?” was the plaintive sigh that came next.

My client’s business revenue had continued to decline, and even with the cost-cutting measures he put in place — cutting all business travel and meeting industry association expenses, a hiring and bonus freeze, reducing the employer contribution toward benefits, allowing for voluntary furloughs and cutting his own compensation by 50 percent — the business pipeline was shallow and not going to get better for some time. He had to protect his business, and the hard, sad decision he had made was to lay off staff.

Our firm was in the midst of working with a longtime client regarding its layoffs. The company had done things well. I offered to share how that company approached its layoffs and my client eagerly accepted, feeling a bit of comfort, I guessed, in having the company.

Skill sets The company’s approach was straightforward: “What is the business model going forward and what skill sets will we need for it?”

My client noted some relief at this approach being job-related and less pointedly personal. We decided his model would be basically the same, just on a smaller scale. So we looked at what skill sets he would need to maintain the smaller company. Some of the skill sets would remain the same, with fewer positions needed. For those skill sets no longer needed, those jobs would go away.

We discussed voluntary separations, however, my client wanted to choose which employees would remain.

As a retirement program was not offered at his company, we skipped the discussion of offering early retirement, which creates some of the same challenges as voluntary separations, i.e., the employees are choosing, not the employer. These two approaches have the potential for leaving the employer with the lowest performers; not the right solution for my client’s problem.

As we next plotted what jobs had to be done going forward and what skills were needed, we found two new skill sets were going to be required under this more compact business. We turned our attention to creating a matrix where he could plug the current employee skill sets in with those that would be required.

Another hard task would come next: identifying the top performers within the required skill sets.

Our following meeting was at my office, and my client had come with the matrix filled out as well as the performance reviews of those employees in positions that would be affected. We went through their reviews and any disciplinary problems, as well as noting advanced training an employee had received on their own or through the employer.

In several instances where there was more than one top performer with a given skill set, we looked at extra skills or transferable skills that would be needed down the road. In several cases, we had to dig deep to figure out the differentiation.

We also reviewed whether there could be any perception we were laying off a “protected group.” For example, were a majority of the employees being laid off more than 50 years old? Women? After careful review, we found it to be a broad cross-section of his work force and not impacting any particular employee group.

I strongly suggested our client contact his outside legal counsel and have them review his work to date. His business was neither a public agency (which has policies that must be followed regarding layoffs) nor unionized (ditto the policy comment), and did not fall under the WARN (Worker Adjustment and Retraining Notification) Act, which affects “mass layoffs” or “plant closings.” Even so, contacting his legal counsel for advice was a critical step in protecting his company.

We set our next meeting, which was to discuss how the layoffs would be communicated to his staff, and what severance and services would be offered.

Diane Miller is president of Wilcox Miller & Nelson, a talent management firm in Sacramento. Do you have tips to share on how to tell your staff about layoffs and what severance pay and services to offer the affected employees? Please send them to ideas@wilcoxcareer.com.

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