When mass layoffs are conducted, employers often take care of laid-off employees through financial compensation, benefit extensions, and outplacement assistance services. What’s less discussed is the importance of supporting the downsized workforce of employees who are still around after job cuts.
In the United States, the overwhelming majority of workers, nearly 80%, are anxious about losing their jobs. As employers continue to carry out workforce reductions in mass in 2023, employees that survive cuts are often left feeling anxious that their job will be cut next, insecure about their worth, and overwhelmed by increased workloads.
In the face of mass job cuts and economic uncertainty, it’s critical that managers and HR leaders proactively support employees (in both a professional and emotional sense) to help them adjust to their new norm and calm the imminent fear and survivors’ guilt that comes along with seeing colleagues’ jobs being cut.
Employers who mismanage layoffs and fail to give remaining employees proper support after carrying out cuts can expect to see a loss of productivity, dips in employee morale and engagement, and even a voluntary exodus of employees—all of which can be hugely detrimental to an organization’s bottom line and culture in the long term.
“Loyalty comes from reciprocal loyal treatment between companies and employees,” Anthony Klotz, Associate Professor at University College London’s School of Management told BBC. “Typically, feelings of loyalty would act as a force that keeps employees from seriously entertaining outside job offers. But in the wake of layoffs, remaining employees are less likely to feel a sense of loyalty.”
Here’s what employers should know about how layoffs impact surviving employees, and how to mitigate the consequences of job cuts.
How do layoffs affect remaining employees?
Mental stress and negative thinking
Even the most confident employees are vulnerable to anxiety and negative feelings when they see their long-term colleagues’ jobs suddenly cut.
Questions that employees may find themselves asking in the aftermath of layoffs include:
- Am I working hard enough to prevent being laid off?
- How will I pay the bills or afford health care if I get laid off?
- Is my position valuable enough to not be cut?
- Are my contributions valuable enough to keep me safe?
When people feel like their livelihood is under threat, they’re more likely to have trouble concentrating at work, which can lead to further stress about lost productivity, creating a self-perpetuating cycle of stress and anxiety.
Increased workload
Employees who survive layoffs are typically obligated to pick up projects and job responsibilities left over by colleagues who were let go. However, sudden workload increases due to workforce reductions can leave employees feeling overwhelmed and underprepared—causing a decline in work quality and job performance, and leaving employees feeling resentful and burned out.
In a Leadership IQ survey of more than 4,000 employers who survived layoffs, researchers found that 77% of respondents reported seeing more errors and mistakes being made after job cuts had been made, and 66% said that the quality of their company’s services has declined since layoffs.
Decrease in employee motivation and productivity
Employers may be inclined to believe that employees who survive layoffs will work harder at their jobs in order to prove their value and protect their position. Unfortunately, that’s not typically how things play out.
While surviving employees do report feeling increased pressure to impress their employers after workforce reductions, studies suggest that those feelings of fear don’t actually translate to increased productivity or work quality. In Leadership IQ’s survey, for example, nearly 3 in 4 workers (74%) reported a decline in their productivity following workplace layoffs, while 64% saw a drop in their colleague’s productivity.
In case it’s not obvious, workforce disengagement is an expensive problem—costing employers across the globe $7.8 trillion in lost productivity in 2022, according to Gallup’s State of the Global Workplace: 2022 Report. As mass layoffs become more and more normalized, employers need to understand how subsequent decreases in employee motivation can affect their bottom line.
How can managers support surviving employees after layoffs?
Frequent manager check-ins
As discussed above, persistent anxiety related to job insecurity can have a profound effect on the mental health and productivity of employees. Workers who feel like they’re at risk of losing their job may have trouble concentrating at work, and even fall victim to the “self-fulfilling prophecy” of pulling back on their effort at work due to feelings of helplessness, writes Executive Coach, Mandy Wilding. Moreover, employees who survive layoffs may be experiencing grief and even guilt due to keeping their jobs while their colleagues were let go.
Fortunately, proactive communication by managers, including sincere acknowledgment of employees’ fears and survivors’ guilt, can go a long way in repairing trust and mitigating lost productivity. In fact, Leadership IQ’s Survey found that workers who gave their managers high scores for visibility, approachability, and candor were 72% less likely to report a decrease in their personal productivity and 65% less likely to report a decline in the quality of their company’s product or service.
If your organization must conduct layoffs, it’s critical that managers are properly trained to have difficult conversations with employees and understand how to provide support to employees who feel confused, fearful, or overwhelmed after job cuts.
Redesign workload to avoid overwhelming employees
It’s not uncommon for employees who survive mass layoffs to have to absorb abandoned projects, pick up extra responsibilities, and even learn new skills in order to fill roles left empty by job cuts.
In times of workforce reduction, managers must thoughtfully and realistically consider how to redistribute workloads and allocate projects to the employees that remain.
This restructuring plan should ideally be discussed and structured as soon as the decision to conduct layoffs is made, but before they’re conducted. Failing to thoughtfully restructure workloads, redistribute job responsibilities, and reassess work objectives for remaining employees all but guarantees increased levels of burnout and a deeply disengaged workforce.
To avoid burdening employers with unrealistic workload increases, managers should work closely with HR leaders to reassess work priorities and determine what adjustments need to be made to ensure the work is fairly distributed.
Next, managers should closely communicate with employees to inform them of changes to their workload or job responsibilities and ensure that they know how to prioritize their new responsibilities alongside their usual work. In some cases, managers may need to conduct training sessions to help employees learn how to efficiently take on their new tasks.
Communication from the top
A fall 2022 survey by PwC found that 4 of 5 (80%) HR chiefs were in the process of carrying out workforce reductions “to a great extent,” including through layoffs, not replacing people who leave, and hiring freezes. Concurrently, nearly half (47%) of employees and two-thirds (66%) of managers don’t trust that senior leadership would adequately communicate its plans in the case of a recession, according to LeadershipIQ’s survey.
That shouldn’t be the case.
HR department heads will benefit from taking initiative to build a culture of transparency from the top, and create workplaces where employees are privy to the financial health of their organization, and aware of potential changes or workforce reductions.
Melissa Terry, head of HR at Clovis, told Worklife that she navigates uncertain economic times by explicitly sharing information with employees. “I am always truthful with them, filling information gaps by sharing market data and the current state of the company’s profits, as well as keeping them informed of potential future actions,” she said.
Layoffs are conducted to cut costs quickly, but if the process leaves surviving employees riddled with anxiety and lost productivity, organizations may find themselves in a worse financial position than before.
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The information contained in this article is not a substitute for legal advice or counsel and has been pulled from multiple sources.
