Companies Are Holding Off on Firing Workers Right Now

Since the pandemic was declared nearly a year ago, the U.S. has shed 9.5 million jobs, according to the Labor Department, but the government doesn’t track performance-related firings. Some companies and human-resources advisers, though, say many employers are unofficially preaching forbearance.

Termination means being cast into a fragile job market and, often, losing health insurance during a global health crisis. Without a clear line of sight into the daily challenges of remote teams, some business leaders say they often are unsure what is at the root of performance problems, especially if the worker has been a good employee in the past.

“We are taking more time to understand personal circumstances,” said Chirantan CJ Desai, chief product officer at ServiceNow Inc., in Santa Clara, Calif. He said the company is thinking twice before putting less-productive employees on performance-improvement plans, which are often a precursor to letting them go.

“We really dig into are there other issues we need to consider: health, child care, living alone, mental health,” he said.

People who were hired or brought on board virtually during the past year, along with employees with a record of high performance in the past, are getting the benefit of the doubt, Mr. Desai said, of his group of about 6,000 employees globally. Before an employee is placed on a performance-improvement plan, they meet with their manager in a video call and discuss, for instance, whether the company didn’t cover something during their training, or whether issues in their personal lives might be affecting their work. As a result, the number of his employees put on improvement plans dropped in the past year, Mr. Desai said.

LaCinda Glover, an HR adviser with consulting firm Mercer LLC, said she has observed employers hesitating to fire and managers less likely to put workers on performance-improvement plans during the pandemic. Bosses are striving to balance economics and empathy, she added.

“The window for whether someone met their objectives last year was much wider than in the past,” Ms. Glover said, adding that many employers don’t want “the impact of the pandemic to create a black spot on someone’s record.”

Rebecca Weaver, a former HR chief and founder of the coaching practice HRuprise, said firing an employee during a health crisis weighs more heavily on a manager than during the normal course of business.

“It’s a tough time economically for a lot of people. There’s a heightened awareness around that and medical benefits,” she said. Companies also are questioning whether to continue with performance reviews for work done in 2020, she added.

Brian Kropp, chief of human-resources research at Gartner, a research firm, said some workers who might have been considered underperformers were cut in large-scale layoffs during the first and second quarters of 2020, as the pandemic set in.

“When it’s cutting across the board, you really look at the people that are at the bottom part of the distribution but not bad enough to get fired and use that as a chance to manage them out,” he said.

In some cases companies are adjusting the way they measure performance.

Human-resources technology firm Zenefits abandoned its annual performance review process, as the pandemic set in, and opted instead to do monthly conversations between managers and their reports. The process began with goal setting and each month after is focused on evaluating progress. Employees are allowed to give bosses feedback on their own performance, too.

“We don’t know what people are doing all day long, so now we have to have accountability and goals,” said Tracy Cote, chief people officer at Zenefits.

The past year has made managers more aware of the challenges workers face at home, making employers more likely to “give people that second and third chance they may not have in the past, knowing that people have extenuating circumstances—some of which we know about and some we don’t,” Ms. Cote said.

Managers who suspect they might have to let an employee go often need to document performance issues using technology, such as monitoring how many hours a worker is logged into their computer while working remotely, said Eve Klein, an attorney with Duane Morris LLP, a law firm specializing in employment and immigration.

David Pogrund, an attorney at Stone Pogrund & Korey LLC, said fired workers who might have had a bad remote-work arrangement or who sought time off because of a sick family member could claim they were retaliated against.

Mr. Pogrund, who teaches employment law for managers at the University of Chicago’s Booth School of Business, said employers should give employees plenty of opportunities to explain and remedy issues.

“New goals or more-realistic goals could be established,” he said. “Nobody wants to fire someone in this time if they don’t have to.”

Anthony Shaw, president of renewables construction company Progeneration Energy in The Woodlands, Texas, said managers have been giving employees several chances to address performance issues, but remote arrangements have made it tougher.

One Progeneration worker was struggling to complete work tasks, so managers gave the person opportunities to improve, split the employee’s tasks among different co-workers and reached out numerous times to understand if personal issues were impeding the work—to little avail. Though Mr. Shaw kept the employee on longer than he typically would have, he said he had to fire the worker.

Write to Patrick Thomas at [email protected] and Kathryn Dill at [email protected]