The Worker Adjustment and Retraining Notification (WARN) act is a government program that mandates that companies planning “massive” layoffs must give communities and employees 60 days notice. This is a great example of the old adage “no good deed” – or in this case act – “goes unpunished.”
It attempts to do the right thing through the wrong means. Giving employees and communities prior notice is a good thing. Attempting to simplify a complex problem and administer the solution through government bureaucracy is a bad thing. Because of exclusions and complicated guidelines, the act is extremely difficult to enforce. Giving more enforcement power to the Labor Department will only help the bureaucrats and the lawyers; not employees or organizations.
Today’s recessionary climate is much more severe and unpredictable than when the act took effect in 1989. Layoff decisions are often made in headquarters locations far removed from the actual sites of the reductions. In the chaotic, ambiguity ridden, heat of battle for survival that characterizes most organizational cultures today, it is often not possible to plan 60 days out or predict the size or scope of layoffs.
Rather than give prior notice because of legislative mandate, it is far better to do it because it makes sound business sense. Here is why:
- If employees have prior notice, they have a sense of control and will actually be more productive because they will not suffer from fear, anxiety, and uncertainly.
- Enlightened employers have found that being honest and clear with employees as a matter of policy is much better for productivity than relying on either extreme of layoff administration (walking employees out the door with no prior notice – or adhering to an artificial time frame such as the sixty days mandated by WARN).
- Research is clear that the best policy is for employers to tell employees what they know and, even more importantly, what they don’t know. If they know or strongly suspect that there will be layoffs in the future they should be straight with employees. This is based on good employee relations, not on a government mandate.
- It basically comes down to a three dimensions of trust: (1), If employees trust that employers will tell them the truth, even if that truth is they will be laid off in the future, they will be more productive and may even avert layoffs. (2), If employers don’t trust their employees to handle the truth and need to walk them out the door with no prior notice, they have the wrong employees or are pursuing the wrong employee relations strategy. (3), Trusting the government to regulate truth telling and authenticity, is a bad bargain for both employee and organization.
