Communicating during layoffs can help retain top talent

With labor costs rising along with energy and food costs, restaurant operators may think layoffs are a quick solution to protect the bottom line, but workplace consultant Mark Wilbur advises clients to slow down and do a thorough analysis of their entire operation before cutting jobs.

Layoffs can create a fearful environment in a business and cause star performers to head for the door, says Wilbur, president and chief executive of the Employer Group, a 111-year-old human resources firm in Los Angeles. In addition to advising companies on HR issues, the firm also helps national and regional chains comply with California’s strict labor laws.

Restaurant companies have terminated thousands of positions so far this year. But the national unemployment rate, although it has risen, was still relatively low at 5.1 percent in March. If good workers also leave, it may be a challenge to replace them, Wilbur says.

What is the best way to keep your star employees while laying off their co-workers?

There is a Golden Rule if you want to keep people: communicate, communicate, communicate. This applies in a multitude of situations, whether there is an acquisition, a spinoff or getting rid of a division.

Why is communication so important?

If employees don’t hear anything, they will assume the worst. It’s on the TV every night. People are barraged 24/7 with bad news and bad things happening to good people. Well, you’re a good person, sitting in your cubicle. You know the company is struggling, you’re seeing the layoffs. If no one is communicating with you, you assume you’re next.

What’s the best way to encourage talented employees to stay?

With your star performers, pull those individuals aside and give them a midyear increase. If you’ve just done a huge layoff, take them aside and explain to them how important they are, that they are not going to be impacted, and make sure you give them a golden handcuff to keep them. Be proactive. Don’t assume they will stay. They are your best people because they are good, sharp, they have their act together. Don’t fantasize that they don’t know there are issues.