Layoffs can half a far-reaching and negative effect on the company and create numerous liability exposures. Many surveys taken by the employees of a company who has experienced major layoffs indicate that:
* the remaining employees have a negative attitude towards their work
* many of the remaining employees feel that the wrong people were laid off
* most of the remaining employees think that there is way too much work to be done by the existing workforce
* most of the remaining employees expressed concerns of the mental anguish and increased stress in the workplace
All of these areas can lead to lower productivity and/or inferior productivity in the products and services produced by the employees that remain. Producing inferior products and services that are going out into the marketplace put your small business at risk from product recalls, lawsuits, and ill will in the marketplace.
Internally the negative effect of layoffs can lead to increased employee lawsuits, discrimination and/or arrest them and claims. The laying off employees, while difficult, the hardest part will be the re-engineering of the work flows for the remaining employees in order to produce quality products and services.
In today’s marketplace a small business owner must be keenly aware of the internal and external liability exposures that can arise from simply responding to market conditions. As always, it is prudent to consult legal counsel with regards to any staff reductions and/or re-engineering of job descriptions for the residual employees. Unfortunately sometimes fixing one problem leads to the creation of another problem. Being a small business owner definitely has its challenges.
