How to Tell Your Employees about Closing a Facility

For better or for worse, thousands of businesses will choose to close down their facilities every week. Closing down can be a natural part of the business cycle—and it can often even be financially wise to do so. But that doesn’t mean that everyone who will be affected by this decision will be able to handle the news.

As an employer, it is important to remember that your employees are more than just the people who help you do business. They are human beings with families, emotions, and ongoing financial needs. This means that if you are in a situation where you need to close a facility, you will want to handle the situation very carefully.

While we aren’t suggesting that closing the facility is something that will ever be easy, there are certainly quite a few things you can do to help make the entire process go better. Keeping that in mind, let’s take a look at how you can best break the news to your employees and other stakeholders:

1. Be Honest with Your Employees

If you are in the process of closing a facility, it is important to treat your employees with respect. The decision you are making, which probably wasn’t easy, is one that is going to directly affect their lives. This is an unavoidable fact. But the very least you can do in these situations is to be honest.

So, what exactly does honesty mean in these particular situations? It means being direct and letting your employees know exactly what is going on. It means being willing to give a reason for these dramatic changes, even if you have a feeling your employees won’t exactly like what they hear.

Honesty, ultimately, is a sign of respect. Too often, employers will keep their dedicated staff in the dark because they are afraid of confrontation. Plenty of employers say they consider their staff to be their “family” or their “most valuable asset”—this is your opportunity to actually show that is true.

2. Establish a Realistic Timeline

Once you decide that you want to liquidate or close a facility, your staff will need to begin planning the next step in their lives. But in order for them to make functional changes, you’ll need to develop a realistic timeline. Working with an experienced liquidation team will help make the process of creating this timeline significantly easier.

You might not know the exact day the facility will be closing right off the bat. But you can at least establish a rough estimate. The difference between the facility closing this week and the facility closing in three months could affect the new jobs your employees are applying to and various other important life factors.

On average, the liquidation process takes about two months. However, depending on market conditions and the nature of your industry, liquidation can take anywhere between a few weeks to a year. Working with an experienced liquidator will make it much easier for you to meet your established timeline.

3. Don’t Be Afraid of One-on-One Meetings

Many people who are closing down their facilities will want to use the “band-aid” approach to breaking the news—in order to avoid confrontation, they’ll just want to “rip” the news as quickly as they possibly can.

But while this approach might be tempting, especially if you hate confrontation, it won’t always be the best way to approach your employees. In some cases, you’ll want to take the time to meet with your employees individually and explain the changes that are just around the corner.

Though these meetings won’t always be easy, they will be yet another way that you can show respect to your employees. This will be especially true if you are in a situation where some employees will be coming with you to the new location while others simply will not.

4. Provide Resources for Anyone Being Laid Off

If your employees are being laid (or even just being asked to make a major work or life change), they are going to need some support. The more you can do to make their near future transition easier, the easier it will be for you to break the initial news.

There are probably a lot of different resources your employees might want to utilize. Anything that makes it easier for them to find a new job or even learn a new skill will probably make their life much better. Additionally, for those employees who are having an especially difficult time, offering access to a mental health specialist might also be beneficial.

5. Be Generous with your Severance Package

When your business is undergoing a major transition, it can be very tempting to solely focus on dollars and cents. But it is also important to remember what helped your business grow in the first place: your employees.

On average, the typical severance package (in the United States) will be ten days per every year worked. So, if an employee worked at your company for ten years, they should be entitled to at least 100 days of severance, which is just over three months. Going above and beyond this standard, if possible, will improve your relationship with your employees even further.

6. Don’t Assign Blame to Your Employees

In the event of a facility closure or liquidation, it can be easy for management to try to assign to blame to everyone but themselves. After all, if you someone you can blame this decision on, you might feel less guilty about the impact you are having on your employee’s lives.

Frankly, the blame game very rarely works. Keep in mind, you are already affecting your employees’ lives in a very serious way. Saying things like, “we didn’t meet our second quarter production quotas, so now we have to close down” won’t be particularly helpful for anyone involved. Even indirect sources of blame, such as blaming the closure on “the economy” won’t make much of a difference. As an employer, it is essential to own your decision, even if that makes you uncomfortable.

7. Be Willing to Answer Questions

Lastly, it is critical to be willing to answer your employees’ questions. The decision you just made will be tremendously influential and, rightfully, they are going to have quite a few questions.

Be sure to consider that anyone who was laid off might be angry when asking you questions. And their questions might not even be rational. When doing your best to answer these questions, be patient, be honest, and do your best to provide the most useful information you can.

Conclusion

Liquidation and facility closures are not always easy. Different groups of employees will react in different ways. But by keeping these helpful tips in mind, you can close the facility with dignity and treat your employees how they deserve to be treated.

Is your business currently considering the liquidation process? We’re here to help. Contact Integra Asset Solutions to learn more.