Layoffs are never the ideal situation for executives of any organization; indeed, they are often the last resort. However, layoffs are becoming more and more common in certain sectors, particularly healthcare. Several hospitals have announced plans to lay off hundreds of employees this year, including St. Vincent Health in Indianapolis, Denver Health and Vanderbilt University Medical Center in Nashville, Tenn.; dozens more hospitals have laid off smaller numbers of employees to cut costs.
Already faced with the difficult decision to initiate layoffs in the first place, executives must also choose which employees will be let go. So what do leaders base that decision on?
In a Harvard Business Review article, Jack Zenger and Joseph Folkman, of leadership development consultant firm Zenger/Folkman, identified six factors common to employees who were laid off during organizational downsizing at a U.S.-based Fortune 100 company.
1. Employees were not viewed as strategic. Often, the employees who were laid off had been more focused on immediate operational, technical or functional issues, according to the article. The authors point out that when organizations go through tough financial times, employees who can create and execute successful strategies are more valuable.
2. Employees did not consistently deliver results. Employees who were let go tended to be those who missed deadlines or did not follow through on projects they had committed to. One observation was that colleagues felt older employees had gotten an early start on their retirement, according to HBR.
3. Employees' ethics had been called into question. The ethics issue came up with just a handful of employees, but when it did, it led to a layoff, according to the article. Some ethical issues included not complying with company policies, inappropriate comments to coworkers or making fake invoices, according to HBR.
4. Employees had poor interpersonal skills. Workers who lacked polished communication skills were seen by colleagues as weak leaders or as difficult to deal with, making them prime targets for downsizing.
5. Employees were resistant to personal and/or organizational change. Generally, this means they were not willing to ask for and respond to feedback from colleagues.
6. Employees had recently lost a sponsor. More than half of the employees affected by this company's downsizing reported recently losing the support of a mentor or sponsor, according to the article. They had no one advocating for them to stay.