In my prior post, I wondered aloud whether there were some rough waters ahead for employers. Apple recently announced that it would not meet it’s earnings estimates in the first quarter of 2019, in part because of soft demand from China. Other companies are expected to announce some similar issues.
Honestly, I’ve had enough conversations in the last few years with HR professionals who just haven’t lived through a major downturn.
Think about this way: For anyone who joined the workforce since 2010 or so, the era of massive layoffs in the financial and automobile sectors had just passed.
But fortunately, there are still a few of us around who remember.
So here are four things to think about:
- Performance Reviews. Why? Because when a downturn hits, your company will need to start a selection process as to who stays and who goes. Inevitably, you will start looking at performance reviews to see about ranking employees. You know what you might find? They all start looking alike. Everyone is slightly above average. While I’m not suggesting everyone convert to a forced ranking system, your performance reviews should be honest indicators of how an employee is doing. Take a look at the ones you are doing this quarter.
- WARN. The Workers Adjustment and Retraining Notification Act is one of those federal laws that you might not have even heard about. But if your company has 100 or more employees, you should. It requires that 60 days notice be given in instances of a mass layoff or plant closing. Before you go down the road of layoffs, you may have obligations to notify your workers and the government of the potential for layoffs. Be sure to comply. Here’s a brief recap.
- Consider a Statistical Analysis. I know — you didn’t like math in high school. But trust me: There is an entire profession of statistical experts available to help you figure out if the proposed layoff may have a disparate impact on a protected class of workers. How is this done? You look at the class of workers that may be impacted by the proposed reduction in force and have an analysis done to see whether your neutral criteria may not be so neutral after all. Sometimes there are explanations for the disparate impact; but sometimes, the analysis can force employers to take a second look. Regardless, this can be an important step. Just make sure to use an attorney to help give guidance here.
- Understand the OWBPA. It stands for the Older Workers Benefit Protection Act and it’s part of the federal law on age discrimination. And if you want your employees to sign separation agreements (as I think you should) when you do your layoffs, your agreements better comply with this act. I did a recap in 2008 that still holds up today.
Before you have a crisis on your hands, talk internally about what the reasonable expectations for 2019 are going to be. If a possible cutback to personnel is even being discussed, now is the time to get ahead of things.