Automakers are worried about having enough cash to stay in business. Banks are turning to the government for more money to lend. Businesses fret about being able to keep people employed. Workers are afraid they might lose their jobs.

Welcome to the recession of 2008 and beyond.

"You want to shut down a holiday party this year?" said Barry Davis, a job search specialist for LMA Consulting Group, 1848 Charter Lane. "Just go in and tell them you were just let go."

So many people are worried about their jobs, it'll seem like black crepe just dropped from the ceiling, Davis said.

In some sectors of the local economy, such as construction and manufacturing, those fears are already being realized, Davis said.

And if economic troubles continue to mount into the new year, those layoffs could spread to other sectors, as well.

Joan Paxton, president of TriStarr Staffing, 2201 Oregon Pike, said she's already seen indications that it could head that way in the number of local hiring freezes she's heard about and in a falloff of temporary employment.

"The first people to get sent home are the temporary workers," she said. And that has included some of the temporary administrative workers her company specializes in.

Still, the unemployment rate in Lancaster County, which was 4.4 percent in September, remains low compared with other areas, despite being up from 3.4 percent the previous year.

"There's a sense that Lancaster County is recession proof," said Scott Fiore, TriStarr's vice president. "But I wouldn't bank on that."

John Kerlish, president of Human Resources Management Associates, 313 W. Liberty St., agrees.

"Here in the Lancaster area, we've lagged behind what's been happening nationally," he said. But "layoffs are not uncommon and are getting more prevalent as time goes on."

To prepare, should that trend continue, companies would be wise to start taking steps now to avoid the pitfalls that can accompany layoffs and to cushion the effects on the workers who remain, these consultants said.

And even if the economy improves and layoffs become unnecessary, those preparations can still be turned to a company's advantage by suggesting ways to operate more efficiently.

A major pitfall
The biggest error companies make when they have to lay people off is in how they communicate that to their workers, Kerlish said.

"There's a right way, a humane, sensitive way to handle it," he said.

LMA's Davis said he's heard some horror stories locally where it was done very poorly.

"I've seen people who said, 'The only thing they didn't do is cuff me,' " he said.

Yet Davis also said that in all the years he's worked with employers, he has never met "anyone who was wringing their hands with glee" over the prospect of having to let people go.

"I think a lot of that is a sin of omission, not a sin of commission," he said.

In the long run, after the economy turns back around, employers will have the opposite problem, said Scott Sheely, executive director of the county's Workforce Investment Board. There'll be a shortage of skilled workers. Will they be able to hire people back?

Nor are the people being laid off the only ones employers have to worry about. They need to take care in communicating with all their workers, and that should start well before any layoffs are made so people already have a good understanding of the business circumstances that led to the reduction.

"Everyone is scared," TriStarr's Fiore said. "I think it's important that companies talk with employees even if the company is in good shape. If you are, your employees needn't worry as much."

That approach will pay off if layoffs do become necessary.

"If your culture is one of open, honest communication, your employees will respond," Fiore said. But "if you do it wrong, you could seriously affect morale and affect your clients too."

Jeannine Hohman, TriStarr's human resource strategist, said the rest of a company's work force will often panic after a layoff, which can lead to serious damage.

Even during times of layoffs, "there's still a war for talent," Paxton said. "There's still hiring going on. There's still competition for those skills," and a company can end up losing more workers than it laid off.

"If you have people that start looking for other jobs," Fiore said, "the best people will be the ones who leave."

Companies cannot only avoid those losses with effective communication but also sometimes turn a negative into a positive.

"The first thing you have to do is get the rest of the work force engaged in moving the company forward," Paxton said. "You may be surprised at the solutions they come up with. This is the time to give your good performers a chance to really shine."

Positions, not people
Another mistake companies frequently make in laying off employees is in how they choose who should go.

"They really don't do the due diligence" by thinking through all the ramifications of what they might be losing in terms of skills and business intelligence, Davis said.

As an example, he told of one client who ended up working another 12 months for the company that had just laid him off because he'd been in a mission-critical position that no one else was prepared to fill.

It all boils down to a question of which position should be eliminated, not which person, Fiore said.

"You have to take personality out of it," he said.

In a small company, that might mean retaining some of the people doing the jobs that will be eliminated and using their skills elsewhere.

It also means having a plan for who picks up the duties of a position being eliminated, Paxton added.

As an example, she said, a company might decide to drop one of two accounting positions when there's not enough work to justify both positions, and then outsource the extra work.

The process also underscores the importance of having good work evaluations in place to document employees' skills, and their strengths and weaknesses.

When done right, that preparation lays the groundwork for explaining the layoff to the person being let go and to those remaining.

"The more you can objectivize the process, the better off you are," Paxton said.

That kind of planning can also lead to greater efficiency, even if business picks back up and layoffs are no longer necessary.

If nothing else, it might prompt a company to improve its evaluation process, Fiore said.

Getting help
Much of the preparation for layoffs can be done by the managers of small companies themselves, but some aspects can benefit from expert help.

"If you are going to be laying people off and you're an Armstrong, you know how to do that," Fiore said. If you're not, you will probably need some help.

For example, workers have far more legal protections than they did a few years ago, Kerlish said.

"Employers have to be much more aware of the legal implications" of layoffs, he said.

Even the timing of layoffs can be tricky. There's a complicated formula for determining a company's cost for unemployment compensation that can affect it 18 to 24 months after the layoff, Hohman said.

There are also legal implications in how employees are told they are being laid off.

Davis said he had just conducted a training session earlier this month for a large company in western Pennsylvania on how to deliver the message to the workers affected by a third round of layoffs.

He coached them not only on how to be humane but also on the importance of sticking to their scripts.

"The minute people start to ad lib, they get into trouble," he said. "I tell them, 'You can't unquote. You can only end quote.' "

Each of the consulting companies in this article also provide counseling and job placement services for people who lose their jobs, sometimes paid for by the companies that laid them off, sometimes by the workers themselves.

The emotional process people go through when they lose their jobs is very much like the stages of grief after a death, Davis said — first shock, then anger, bargaining and depression, and finally acceptance and resolution.

A good counselor can help laid-off workers go through that process and clear their minds so they're ready for the next stage in their working lives.

"The people who are released get a chance to think, 'Now, what do I want to do?' " Davis said.

Kerlish recalled one local company that called on him several years ago when it suddenly lost a customer that accounted for half the work being done by its 150 employees.

That company had no choice but to lay off half its work force, and it had no time to prepare them for the shock of losing their jobs, Kerlish said.

What the company did do, though, was rent a large room at a local restaurant and hire him to conduct a series of sessions to help the unemployed workers.

Kerlish said that in three sessions over a period of three weeks, at which the company provided breakfast, he helped the former employees move through the cycle of grief and on to training about how to write resumes, tap into retraining programs and look for new jobs.

Kerlish brought in benefit representatives to talk with them about their pension and 401(k) plans, and people from other companies to talk about the job openings they had that the workers could apply for.

The word on the street after people found out what that company had done for its former employees was, "Wow, that's the kind of company I want to work for," Kerlish said.

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Dennis Larison is editor of the business section and can be reached by telephone at 291-8753 or by e-mail at dlarison@lnpnews.com.