Layoff strategies for nonprofits

Molly Brennan
Molly Brennan

Molly Brennan

Many nonprofit organizations are coming to the painful realization that layoffs may be an unavoidable result of the current economic crisis.

But there are ways to manage layoffs that allow you to lay the groundwork for future growth by identifying areas of job duplication, strengthening processes, and recognizing and rewarding top talent in your organization.

Assessing talent and job functions

There are two things that should be addressed at the outset of a layoff process: identifying top talent and reviewing job functions.

It sounds obvious, but it’s not always immediately clear which employees are actually performing and which aren’t.

A wholesale review of every employee in your organization, not just the people you immediately think of as low performers, is the best place to start when it comes to deciding who should be retained and who should be let go.

You will also want to review job descriptions and make sure that the work people are actually doing on a day-to-day basis lines up with what the organization thinks these people are doing.
The process of reviewing and aligning job descriptions frequently reveals duplication of effort — two or more people managing the same task — or a mismatch between strengths and responsibilities.

Before deciding which staff members will be laid off, it’s also vital to consider what is being cut in terms of job function.

A common layoff misstep is to eliminate a poor performer who is doing an essential function. Once you eliminate a position, you can’t expect all of that individual’s responsibilities to be picked up and executed satisfactorily by other team members.

To avoid this, break down an individual job description into low-value and high-value work. What high-value work can be reassigned (without overloading others) and what low-value work can you live without?

For example, if you are looking at a fundraising position, the high-value work would probably be the relationships this person maintains with major donors, while the low-value work could be coordinating donor events that aren’t resulting in increased capacity or funding.

The former would need to be maintained at current levels, but the latter could probably be cut back without adverse effects.

Managing during layoffs

Obviously you want to manage staff as respectfully and sensitively as possible during a layoff. The best way to do this is to be transparent and make sure that communication from the top down is consistent and clear.

Be sure that all managers have the same talking points and guidelines for framing any discussions about layoffs, and be honest about whether future layoffs are a possibility.

It’s also important to be prepared for the dip in morale that layoff survivors, including senior managers, are likely to experience. By carefully communicating that the layoffs were undertaken with great consideration and are designed to promote future growth, you may be able to allay some fear and anxiety.

You also will want to be careful about overloading employees. The “do more with less” culture often results in overwork, and eventually, burnout.

Remaining employees cannot be expected to simply pick up all of the responsibilities of the employees who have been laid off in addition to their own work.

Essential tasks of laid-off employees should be carefully reassigned, and managers should follow up regularly with staff members who have been asked to take on additional responsibilities to make sure they are handling the increased workload.

Rewarding top talent

It’s crucial to continue to find ways to reward top talent during a difficult organizational period. Your star performers need to know that they are valued in order to maintain productivity and a sense of engagement during a time of potential overload and increased anxiety.

One simple way to let high performers know how important their contributions are is to constantly make the connection between the work they do on an everyday basis and the organization’s mission.

Unless employees are engaged in direct service, they may get buried in the details of their jobs and lose sight of the impact their work has on the clients your organization serves.

There are many other free or low-cost things you can do to reward top talent and increase retention and engagement during layoffs.

* Flextime
Study after study shows that increasing numbers of employees value flexibility more than salary. Consider allowing top performers to work from home occasionally or set a new flextime policy that allows employees to work schedules that suit their individual needs.

* Public recognition
This is one of the simplest but most overlooked ways of letting employees know they are valued. Try to find ways to call attention to big and small successes in public venues.

* Increased responsibility or a title change
Raises may not be an option, but you can still keep employees moving down the path of professional development by giving them increased responsibility or a new title. The process of reviewing job descriptions outlined earlier in this article may uncover job tasks that could be assigned to someone else as a way of helping them grow professionally.

* Increased opportunities for mentoring
Consider establishing a mentoring program within your organization, or at least identify a handful of star performers who could benefit from coaching and help them connect with senior leaders.

* Extra time off
Consider rewarding hard work or the extra effort employees are putting in to get work done after layoffs by granting an extra personal day for certain employees. This is an easy way to make employees happy that doesn’t impact the bottom line.

Molly Brennan is director of executive search at Koya Consulting, a national retained search and consulting firm dedicated to the nonprofit sector. She can be reached at

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