No one likes layoffs. For employees, getting laid off is a life-changing experience, impacting not only career and financial goals, but well-being and mental health. For companies, layoffs can erode trust, morale and overall culture. Therein lies opportunity for CHROs, argues Andy Hamilton, to make an upsetting process more empathetic, and better mitigate any damages for employers.
Andy Hamilton is the co-founder and CEO of When Insurance, a Highwood, Illinois, practice that specializes in compassionate off-boarding care. In an interview, he shares best practices in the event of a layoff, how CHROs can make the process less painful and how companies can protect their culture and costs.
How can CHROs offer more compassionate care for individuals in the unfortunate event of a layoff?
For many, a layoff can be a life-changing experience. The experience can drive us to tackle opportunities we never would have before. But it can also interrupt our goals, as well as impact our financial and mental health.
There’s immense opportunity for HR leaders to provide a more tailored and empathetic post-employment experience, one that better prepares the employee for the journey ahead, as well as helps enterprises mitigate unnecessary healthcare and operational costs.
Often, one of the most challenging parts of the transition is choosing new health insurance. Instead of dumping a ton of documentation at the feet of departing employees and telling them to make sense of it, HR leaders should look to invest in technology that helps them more quickly identify the best plan, customized for price, policies and other potential factors.
Meanwhile, only an estimated 10 percent of employees take advantage of career coaching and financial programs that many enterprises offer. HR leaders can invest in solutions that help transitioning employees more easily tap into these services.
How should organizations think about protecting their brand, keeping culture intact and retaining morale with existing employees after a layoff?
Few things in an enterprise today happen in isolation. Events like layoffs reverberate throughout the organization, impacting morale and potentially making it harder for businesses to hold on to remaining talent. Studies suggest even a minor reduction in workforce can trigger more departures.
Meanwhile, the reputational damage can make it harder to attract new employees. Whether it’s Blind or The New York Times, the news of a badly managed layoff spreads fast. Today, how someone leaves an organization is just as important as how they enter. Yet, while many enterprises focus on a stellar on-boarding experience, the off-boarding process remains lackluster.
As the last interaction employees have before they depart, an emphatic and seamless off-boarding is key to protecting the brand the organization worked so hard to showcase during on-boarding. By providing alternatives to COBRA, for example, with flexible reimbursement policies and early retirement health insurance solutions for pre-Medicare retirees, businesses can save money and protect their brand in the marketplace.
How can companies reduce their financial exposure given skyrocketing health insurance costs, both for current and exiting employees?
More than half of Americans under the age of 65 rely on employer-sponsored healthcare. It’s one of the main reasons why layoffs can be so devastating. Too often, employees are only informed about their COBRA option and there is little or no support for ACA and private medical plans. Not only do these rarely work for people used to their more tailored policies, it can cost businesses a lot of money.
In fact, enterprises can save upwards of $23,000 per employee by diverting them away from COBRA. And with less COBRA participants, the business is in a stronger negotiation position during insurance renewals.
What are some of the less well-known impacts of return-to-office mandates on a company’s bottom line? Are leaders overlooking the potential costs of mass exits when mandating workers to return to the office?
With RTO mandates, there’s a huge risk that enterprises lose valuable talent in the transition. Over the last few years, many people have built lives around working remotely, and it simply doesn’t make sense for many of them to uproot their lives to be near an office. And many others don’t see the value in commuting to an office five days a week.
While organizations often expect a certain number of employees to leave, what they aren’t considering is how the increase in turnover will likely increase COBRA participation rates, thereby increasing the potential for high-cost claims from individuals who no longer work for the company.
