Worried you might be losing your job? How can you tell when a company is ready to reduce its workforce? Companies will typically implement several cost cutting measures before taking the biggest plunge of all…a layoff.
Ten Layoff Warning Signs:
- HR staff looks stressed – Your HR department is responsible for orchestrating the layoff which may require weeks of planning. The normally upbeat HR person may communicate less and become distraught as she ponders terminating those individuals she was responsible for hiring.
- Hiring freeze – This is one of the first signs that a layoff may be looming. Hiring budgets get slashed and job openings are put on hold. Workloads will increase as there are now fewer employees to handle the load.
- Merit increases are eliminated – Companies save money by doing away with pay increases. In this economy it is not uncommon for companies to freeze salaries for 12 months or longer.
- Pay cuts – If a company continues to struggle it will implement pay cuts on a temporary or permanent basis. Many local companies have been implementing pay cuts of 5 to 15% or more. HP implemented a 5% permanent pay cut last year for most employees, with executives taking a 10 to 15% cut. While a drastic measure, it is less painful than a layoff.
- Corporate penny pinching – Changes in attitude toward basic expenses become the norm. I once worked for a company with cash flow problems that reduced janitorial services and heavily scrutinized office supply purchases. IT expenditures for new computers went away over night.
- Reduction in benefits and other perks – According to Valerie Elliott, Human Resources and Compensation Consultant in Scotts Valley who works with many Silicon Valley companies,”trimming benefits such as eliminating the match in 401(k) plans and increasing employee health care contributions are very common trends right now”. Not to mention elimination of holiday parties and company picnics. These perks are a sign of ‘better times’ for sure.
- Lots of closed door meetings – HR will conduct numerous planning meetings with department heads to review and revise the ‘lay-off list’. The rumor mill starts if it hasn’t already. Hallway conversations are kept to a whisper, and it becomes so quiet you can hear the sound of a pin drop. Employees know there is something up and they keep their heads down trying to maintain a low profile.
- Reduced work weeks – If losing pay is not painful enough, your company may opt for reduced work week schedules and implement the Work Sharing program to combat reduced revenues. Offered through EDD, Work Sharing enables employers to avoid layoffs by reducing employee hours while allowing employees to collect partial unemployment benefits.
- Contractors and temps are let go – This is one of the last steps before a layoff occurs.
- Your boss stops talking to you – All of a sudden the communication you thought you had with your boss comes to a halt. There is no eye contact when she asks you to do something. While being laid off is certainly stressful for you, it can be equally stressful for the person who has to give you the bad news. HR people will continue to distance themselves from you as well. Layoffs are a stressful event for everyone involved.
Pay attention to these red flags to get a realistic evaluation of your company’s financial health. If you think your job is in jeopardy it’s time to prepare for the worst. Stay tuned. In my next article I will discuss ways in which you can prepare yourself for a layoff. Follow me on Twitter.