Rapid Response Regulations Series #6: Layoff Aversion Strategies & Activities

Posted 7/19/2017 2:25 PM by Jeff Ryan

Now that we have addressed the question of who has the responsibility for carrying out Rapid Response activities, let’s jump into one of the areas of the WIOA regulations that are much more comprehensive than under WIA: layoff aversion.

As we will get to in the next blog entry, the regulations at 682.330 have a new requirement to conduct layoff aversion activities as part of Rapid Response. But before we get to this requirement, let's talk about layoff aversion a bit more broadly.

The regulations at §682.320 attempt to answer the following question: What is layoff aversion, and what are appropriate layoff aversion strategies and activities?

Prevention and Cure image 

Let us start by focusing on §682.320(a), which provides the definition for layoff aversion:

Layoff aversion consists of strategies and activities, including those provided in paragraph (b) of this section and §§ 682.330 and 682.340, to prevent or minimize the duration of unemployment resulting from layoffs.

A few items to point out in this first paragraph: First, layoff aversion includes both strategic and operational activities; the regulations contain a number of such strategies and activities that Rapid Response teams may wish to consider (we’ll cover those below). Second, the paragraph includes ETA’s definition for layoff aversion—we first introduced this broader concept of “prevention and minimization of unemployment” in TEN 9-12 and have now formalized this definition as part of the WIOA Final Rules.

Let’s now look at the list of layoff aversion activities as included in the regulations. The list is fairly lengthy, as we wanted to provide a number of examples. However, this list is not exhaustive, and there are likely many other strategies or activities that you may wish to undertake as part of your layoff aversion approach that would be allowable. So we encourage you to be innovative and creative in thinking about the possibilities for layoff aversion.

Following each example, we’ve included a brief discussion, but we hope that you will also share your thoughts on these and other items in the Comments section below.

§682.320(b) Layoff aversion activities may include:

(1) Providing assistance to employers in managing reductions in force, which may include early identification of firms at risk of layoffs, assessment of the needs of and options for at-risk firms, and the delivery of services to address these needs, as provided by WIOA sec. 134(d)(1)(A)(ix)(II)(cc).

Remember, layoff aversion includes minimizing the duration of unemployment, in addition to preventing it altogether. Therefore, layoff aversion is more than just preventing layoffs; it is also ensuring rapid reemployment be a key focus of Rapid Response activities.

(2) Ongoing engagement, partnership, and relationship-building activities with businesses in the community, in order to create an environment for successful layoff aversion efforts and to enable the provision of assistance to dislocated workers in obtaining reemployment as soon as possible.

Business engagement, which is a comprehensive, strategic approach to building relationships with businesses through provision of valuable solutions to meet their needs, is closely tied to layoff aversion, which itself provides valuable solutions to the needs of businesses. This example is included to provide additional support for the notion that Rapid Response must be a critical component of any business engagement strategy in a state, region, or local workforce area.

(3) Funding feasibility studies to determine if a company’s operations may be sustained through a buyout or other means to avoid or minimize layoffs.

While rare, there may be opportunities where companies may be saved, or layoffs prevented, through employee buyouts or other financial actions. Before investing significant resources, however, it makes sense to determine whether a particular company will be viable with new ownership or other changes, and a feasibility study, which may be paid for with Rapid Response resources, may be a good option for determining this viability.

(4) Developing, funding, and managing incumbent worker training programs or other worker upskilling approaches as part of a layoff aversion strategy or activity.

A major change under WIOA is the ability for you to use Rapid Response funds to directly pay for incumbent worker training programs, where the activity would be part of a layoff aversion strategy or activity. Under WIA, without a waiver, Rapid Response could only develop such approaches, but not fund the actual training.

(5) Connecting companies to:
(i) Short-time compensation or other programs designed to prevent layoffs or to reemploy dislocated workers quickly, available under Unemployment Insurance programs;
(ii) Employer loan programs for employee skill upgrading; and
(iii) Other Federal, State, and local resources as necessary to address other business needs that cannot be funded with resources provided under this title;
Even though many of these resources are not funded through Rapid Response directly, a valuable solution to provide to your customers is to connect them to a wide array of available resources to support them and enhance overall layoff aversion efforts.

(6)  Establishing linkages with economic development activities at the Federal, State, and local levels, including Federal Department of Commerce programs and available State and local business retention and expansion activities.

A big part of operating successful layoff aversion activities is knowing, and being able to connect companies to, other business-focused programs in the state, region, or community that may enable to the company to succeed and prevent or limit layoffs.

(7) Partnering or contracting with business-focused organizations to assess risks to companies, propose strategies to address those risks, implement services, and measure impacts of services delivered.

Many business-focused organizations, such as the Manufacturing Extension Partnership (MEP) program, Trade Adjustment Assistance (TAA) for Firms, and others, may provide critical support to businesses across a variety of industries with a variety of needs; ensuring partnerships or even funding contracts with these organizations can ensure your layoff aversion approach can deliver valuable solutions.

(8) Conducting analyses of the suppliers of an affected company to assess their risks and vulnerabilities from a potential closing or shift in production of their major customer.

One area where layoff aversion activities may be especially successful is addressing impacts of a primary company closure/layoffs on its customers or suppliers; understanding the ripple effects of one layoff may give you a good opportunity to develop timely intervention to prevent additional layoffs. This can also be important activity to undertake in advance of layoffs at a particular company—if there are companies in your area that might be at risk, and might have a complex supply chain, studying the supply chain and understanding potential impacts in advance of any downturn can prove valuable.

(9) Engaging in proactive measures to identify opportunities for potential economic transition and training needs in growing industry sectors or expanding businesses.

Ensuring that you are constantly researching, surveying the economic landscape, and paying attention to the business lifecycle can ensure that you are able to act quickly when opportunities to prevent or minimize unemployment arise.

(10) Connecting businesses and workers to short-term, on-the-job, or customized training programs and registered apprenticeships before or after layoff to help facilitate rapid reemployment.

Work-based learning can both prevent layoffs, by ensuring the current workforce has the skills necessary for the business to succeed, or minimize the duration of unemployment by providing incentives to companies to hire those who have been laid off from other businesses.
Many of you will likely recognize that these layoff aversion examples in the regulation are not new ideas—TEN 9-12 introduced many of these several years ago. But we wanted to be sure to strengthen layoff aversion by including these examples directly within the regulation

We will talk much more about layoff aversion on this blog, but as always we encourage your thoughts, ideas, and questions—and we really want to share stories of your innovative or successful layoff aversion strategies and activities, so join in the conversation in the Comments section below!


Related Resources

The Intervention Timeline

Layoff Aversion Questions for Business

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Posted: 7/19/2017 2:25 PM
Posted By: Jeff Ryan
Posted In: Business Engagement Collaborative
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