Your organization has decided to have a voluntary layoff event. That’s great! You’ll be able to reduce your payroll costs in way that is less damaging to morale and employer brand than with a traditional layoff event.
But now you have to figure out how to announce your voluntary layoff event to your workforce. Should you send an email? Handwritten letters? Put a memo on the company board?
We have all of your questions covered!
But before we dig into the nuts and bolts of creating a voluntary layoff letter, make sure to downloaded our template here:
Now, let’s get to it!
How is a Voluntary Layoff Letter Different?
A voluntary layoff letter is different from a traditional layoff letter because, rather than letting people know that they are going to be laid off, it announces the start of the program.
Traditionally, when a layoff letter is delivered, it notifies someone that they will be without a position at the organization at a certain date and time. Because of this, traditional layoff letters are met with much more anxiety from human resources teams.
While your human resources team should pay just as much attention to the details of a letter announcing your voluntary layoff event, because of the lessened impact it shouldn’t be as stressful.
However, you will still want to make sure that all documentation and and processes are set up correctly as referred to in your letter to ensure a smooth announcement. For example, if in your letter you refer to your company's intranet as to where employees should go to find documentation about if they qualify and to apply, you will want to make sure that is all set up properly before you send out the letters.
How should you deliver the voluntary layoff letter?
This will really depend on your workforce. If all of your employees are at computers and regularly check emails, it would make sense to send out the letter via this medium.
But if you have a workforce that is comprised of primarily factory workers who don’t have an email account, this will not be the best avenue for you. You might want to include the letter with their checks that are handed out weekly, or even require managers to read the letters out-loud to employees during team meetings.
It is important that you pick a method that won’t unfairly target or leave out a particular group. This could also mean that you combine different methods of delivery.
Whatever you choose, make sure that it makes sense for your particular workforce.
What should you include in a voluntary layoff letter?
There is not one standard way to create a voluntary layoff letter. It should really be developed based on the objectives of your particular team, and with the consideration of your corporate counsel.
But there are some things that most organizations do typically include:
- Explanation of what a voluntary layoff is
- Why the organization is having a voluntary layoff
- A high level overview of who will be eligible
- How an employee should apply for the voluntary layoff if interested
- The financial incentive to leave participate in the voluntary layoff
- Where the employee can find more information
- The application due date
- When any information meetings will be held
Not all of these are required! What you include in your letter will depend on the objectives of your organization.
Now let’s dive into each of these sections, and why you might want to include them:
Explanation of what a voluntary layoff is
It is important to provide this explanation for several reasons. First, many of your employees might not know what a voluntary layoff is. The minute they open this letter they will see the word layoff and go into a panic. By explaining what a voluntary layoff actually is, you will ensure that your workforce morale doesn’t plummet, and will keep people engaged enough to read the rest of the letter.
Why the organization is having a voluntary layoff
It’s always a good idea to explain to your employees why you are having a reduction event. If people understand a decision, they are much more likely to accept it. This will also explain to your employees why it is so important for them to seriously consider a voluntary layoff if they are ready for a new opportunity.
By communicating to them that your organization is having a voluntary layoff as a way to avoid an actual layoff in the future, it will help them see this reduction event in a better light. While no one enjoys a voluntary layoff, people will appreciate that your organization is trying to avoid a permanent reduction in force. This move will definitely build your organization some good will!
A high level overview of who is eligible
If every one of your employees will be eligible to participate, make sure to state that in the letter. If only particular groups will be eligible, make sure to be specific about which groups and which qualifications will make them eligible.
For the sake of transparency, even if certain groups won’t be eligible to participate in the voluntary layoff it is important to let people know that are in direct communication with those groups about the event.
Now if you work at a 135,000 person company, and 30 people will be participating in a voluntary layoff across the world, it won’t make sense to notify everyone in that organization about that particular event. But telling the people that they work with directly and in that specific office could be a good idea.
How an employee should apply for a voluntary layoff if interested
Your letter should describe the steps your employees should take if they want to apply for the buyout. This sounds as simple as it is! Just give clear directions about where an employee can find the form to apply and where it needs to be submitted.
Most organizations keep this on their company intranet. In the letter, state this and then make it clear how to find the letter from within the system.
If you don’t have a company intranet, or it doesn’t make sense to have these particular employees look for information on it, keep the forms in a centralized location or with a specific person and then state that within the letter.
The financial incentive to participate in the voluntary layoff
To entice employees to participate in the voluntary layoff, your organization will need to provide an attractive financial package. Most organizations offer more financial payout to employees in a voluntary layoff than in a traditional layoff, so make sure that this is clear to employees receiving this letter.
They should understand the financial positives that come with voluntarily taking a package now, as opposed to being laid off later and receiving less.
But make sure that this does not come off in a threatening way to employees. If your employees feel pressured to take a voluntary layoff for fear of retribution with a layoff in the future, you could be liable for a lawsuit.
Where the employee can find more information
Most organizations keep any supporting documents containing information about the voluntary layoff in the same place as the application form on the intranet. This makes logical sense, as it makes it the most easy for your employees.
If you aren’t hosting this information on your intranet, make it available wherever you are also keeping the application forms, and notate that in your letter.
Most organizations provide documents containing information about how participating in the voluntary layoff will impact their retirement plans, health insurance, and their unemployment eligibility.
The application due date
This part of the letter is easy! Include the following information:
- The window to submit applications to participate in the voluntary layoff
- The window when employees will have their last day of work (this could be a day, a week, or even a month)
- When employees will receive confirmation about moving forward with their voluntary layoff
When information meetings will be held
Finally, make sure to include any details about when information meetings will be held. Many organizations choose to have information sessions where human resources representatives can answer any questions about the voluntary layoff process. Make sure that your organization has enough sessions that people who work different hours will be able to attend.