Data-Driven Layoffs: The Importance of HR Analytics

Layoffs are complicated. When organizations have to downsize or restructure, it’s a challenging time for everyone involved, from hourly workers to HR professionals. Frontline organizations especially can struggle with communication and low morale during layoffs. 

The good news is that there’s a way to navigate layoffs better to maximize good decisions and reduce negative consequences to employee performance and company culture. 

Comprehensive HR data. 

HR analytics is a powerful tool that brings greater visibility to patterns and gives you the knowledge you need to make effective decisions about your workforce. 

In this article, we’re going to explain why HR analytics matter when it comes to layoffs as well as share the best practices for data-driven layoffs. 

Why Data Matters When It Comes to Layoffs

Layoffs typically happen when organizations are going through a challenging period and need to make important business decisions quickly. HR departments have to make up their minds fast, but making the right decisions under pressure is taxing and leaves a wide opportunity for error. 

Implementing a data-driven process when it comes to layoffs helps HR teams & C-suite leaders make better decisions, faster. 

Having solid workforce analytics in place means having the ability to make informed decisions that are based on data, not emotions or personal opinions. It protects your company from litigation and reduces the risks associated with layoffs. 

Data makes it easier to make tough decisions, especially when you’re in a time crunch. 

What Is HR Analytics? 

At its core, HR analytics is the antidote of guesswork. 

It’s the sum of data about your workforce that allows you to see trends more clearly and meaningfully measure performance. 

HR analytics can help you improve a wide range of processes, from talent acquisition to training & development. During layoffs it can help you to: 

• Decide whether to conduct a layoff or consider an alternative
• Compile data-driven layoff lists 
• Accurately evaluate employee engagement and performance
• Identity discipline trends, such as attendance and warnings
• Protect your company from litigation 

There are different HR analytics tools you can use to improve your human resources management, but we encourage you to try Secchi. 

It’s carefully designed specifically for hourly & frontline teams by HR veterans and greatly reduces risk with standardized documentation and reporting. 

Key HR Analytics to Track 

The field of HR is rapidly changing and moving away from outdated approaches like annual performance reviews. 

“People” analytics and continuous performance management are driving HR forward, and there are multiple talent analytics that are essential to track on a regular basis, including: 

• Cost-Per-Hire (CPH): having an accurate estimate of your cost-per-hire can help you make smarter decisions and hire better quality employees for less money.
  
• Time to Hire: understanding this metric helps you create a streamlined hiring process and create a strong flow of good candidates.
  
• Turnover rate & retention rate: frontline work environments can experience turnover rates as high as 60%. Figuring out how to keep the right people can make it easier to let go of employees who’re not the right fit.
  
• Turnover cost: hiring new employees is expensive, but high turnover rates also come with non-monetary costs, such as low engagement rates & morale.
  
• Absence rate & discipline: workers not showing up for their shifts can be a major — and costly — problem. You can use the absence rate and other discipline metrics, like warnings, to inform layoff decisions.
  
• Employee engagement: identifying & keeping highest-engaged employees during layoffs can help you build stronger teams.
  
• Demographic metrics: not analyzing the demographic impacts of your decisions can lead to unintended consequences and even legal challenges in some cases.

Manually tracking HR data is time consuming, messy, and even impossible in some cases. 

This is why frontline organizations choose to use Secchi, an hourly performance management tool that streamlines data and allows you to make smart & informed decisions in less time. 

Data-Driven Layoffs: Best Practices

Communicate Clearly

Communicating effectively and often is key to creating a successful experience even in unforeseen circumstances. 

There’s no such thing as overcommunication when it comes to layoffs. Communicate early and frequently to help your employees process an anxiety-inducing and confusing period of their careers and feel more prepared for what’s to come. 

It’s also a good idea to give your employees a space to communicate and express their thoughts. Open communication is always a sign of a healthy work environment, even if your current circumstances require you to make tough decisions. 

Secchi makes it easy to communicate with your hourly employees using a text-like messaging feature to enhance connections. 

Lead with Empathy

Few things are worse than getting laid off in an impersonal and hasty way. Hourly workers already struggle with feeling that they’re undervalued compared to salaried employees, and seeing their team members getting laid off without a proper process can result in low morale and disengagement. 

Conduct layoffs in person and show that you empathize with the workers you’re letting go. Layoffs are a fact of business, but it doesn’t mean that you can’t be human about it. 

Provide Support After Layoffs

It’s essential to show your employees that you care about them and provide support after layoffs. Seeing their fellow team members leave the organization is stressful for all employees, and your workers shouldn’t feel like they’re left on their own after layoff decisions have been finalized. 

Communicate, offer opportunities to connect, and help your workforce adapt to the recent changes. 

Secchi: Performance Management Software to Make Tough Decisions Easier 

HR analytics can help you have a more successful and less stressful layoff period, but it’s essential to have the right tool to track and analyze your data.  

Secchi is an hourly performance management software that provides clarity for frontline leaders & HR professionals to make data-driven decisions. 

It helps you make thoughtful decisions faster and protects your organization against litigation associated with layoffs with documentation and reporting. 

Book a demo today to discover how Secchi can make your life easier.