Layoffs: managing those left behind

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It’s not pleasant for anyone when layoffs become necessary, but there’s often a lot of focus on supporting those being let go, meaning morale and engagement can suffer for those who remain.

Workers wonder if there’s more to come – driving some to update resumes and consider leaving before they’re forced out – and have to cope with the range of emotionsthat can result from layoffs, from guilt to survivor’s envy (when employees wish they’d been cut themselves) to resentment, emotional contagion (picking up and displaying the negative emotions of others) and uncertainty.

“In situations where it’s handled badly or uncaringly there may be a loss of morale or employee commitment,” says Andre deCarufel, associate professor of organizational studies at Schulich School of Business at York University. “One of the reasons that sometimes happens is that the executives who made that decision have a better handle on the big picture. For the people hearing about it… they’re in a different emotional place than the execs.”

There are many different methods for making layoffs, which can all have different effects on morale, deCarufel says.

First in, first out

Usually done on a voluntary basis, this option involves offering early retirement to long-term and older staff. As these are often the highest paid employees, this method can be an effective way to reduce costs. Knowing the process was voluntary can lessen the guilt that remaining staff feel.. Employers should be mindful of possible lawsuits from allegations of age-discrimination from taking this approach (If not done on a voluntary basis).

Last in, first out

Common in unionized workplaces, this process involves cutting those with the least experience first. If handled well this can be easy to explain while minimising survivor resentment, but if more cuts are expected you could run the risk of  talented, young and valuable newer workers deciding to jump ship rather than waiting to be let go.

“Rank and yank”

Performance-based selection involves laying-off the least productive employees (often the bottom 10%). While this technique often makes the most business sense, it can lead to the most resentment and confusion amongst survivors, so employers should be very careful to clearly communicate the selection criteria to staff.

Strategic

Whether you’re cutting departments or products or a specific office, this approach usually ends up being geographically specific. It’s easier for remaining workers to understand the reasoning behind these cuts, and to feel relatively confident that they won’t be next.

Value based

It’s not always all or nothing. If your company is trying to minimize layoffs by reducing hours and costs in other ways, you can build up a lot of goodwill by showing that you’re making a lot of effort. However, cutting everyone back to four-day weeks will affect everyone and you could find staff leaving for other jobs. It could be less painful in the long run to layoff the staff and deal with the fall-out.

By communicating clearly, explaining motivations and giving as much information about the future as possible you can reduce the effect of layoffs and maintain morale.

Best practice tips:
 

  1. Give as much information as you can
    Layoffs often follow months of executive level discussion and strategizing, but workers don’t see that. By giving as much information about the company’s reasons and goals for the cuts you can help workers see the layoffs as necessary.
     
  2. Try to do all the cuts at the same time
    Uncertainty will keep your staff on edge and have the more marketable workers, who are exactly the staff you want to keep, polishing their resumes. If you can assure them that the process is done, they can relax and focus on their jobs, knowing they won’t lose them soon.
     
  3. Communication needs to be on-going and consistent
    There’s a big difference between “We’re not considering layoffs.” and “We’re not considering layoffs at this time.” Have one executive do all the communicating to avoid misunderstandings from different wording and ensure that the message is consistent. In these days of instant and frequent communication one announcement is insufficient. Two-way, on-going communication will reassure your staff that you are listening and care.
     
  4. If possible, help staff understand how management decided which people to cut
    “Survivor’s guilt” is common among those left behind so reassure them there’s a reason for every decision. If it seems like cuts were arbitrary or unfair that guilt will be worse, especially as workers may feel significant loyalty to their terminated colleagues.
  1. Be good to those who are leaving
    Giving the departing staff a “soft landing” with counselling and severance packages shows the company cares about all its employees. Showing respect and compassion to those being laid off will generate goodwill among those who remain.

 

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  • Geoff Nix on 2012-06-28 12:38:47 AM

    Agree with the broad thrust of this article. Also recognise the importance of giving the 'survivors' the tools to continue managing 100% of the pre-retrenchment workload with what could be 90% of the workforce.

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