Mass layoffs and reductions in force affect all employees in the company. While laid-off workers face the financial challenges of losing their source of income, not to mention the psychological blow of feeling rejected, the remaining workers may be happy to keep their job but struggle with survivor guilt.
While low employee engagement and a slowdown in productivity can result from a lack of growth and development or major changes in the company, workforce productivity is also likely to slow during layoffs and restructuring, due to uncertainty about the future or being overwhelmed with changing tasks. When planning a major downsizing, creating a plan for the remaining employees is crucial.
It’s not only important to productivity, but to ensure your people feel psychologically safe, valued and engaged with the organization to help avoid attrition. News about layoffs can cause anxiety among workers — even those whose jobs are secure. As your employees lose confidence in the company, they’re more likely to seek and take other opportunities leading to undesirable turnover, also contributing to productivity losses.
effects of change on employee productivity
According to a study by Leadership IQ, three-quarters of employees who survive a reduction in force have declining productivity. Those who choose to remain may not continue to be productive. With the increasing trend of quiet quitting and resentment around quiet promotions, remaining employees can lose focus on the job due to feeling overworked and burned out.
Employees recognize that, in many cases, one round of layoffs may be followed by others. Rather than wait until it’s their turn to be released, these employees may well start putting more energy into updating their resumes, building their networks and proactively planning their next career move.
top 5 tips for keeping employees engaged during a layoff
When you prepare your workforce for layoffs, you will have better outcomes and minimal reduction in productivity. The following tips can help improve employee morale, and minimize a slowdown in productivity and unwanted attrition after a reduction in force:
1. communicate transparently with survivors
Failing to communicate with remaining employees about the layoffs can affect morale. If employees learn about the reduction in force through company rumors, the press or other sources, it breeds disinformation. And inaccurate information or speculation about the layoffs will cause anxiety and a lack of trust. It is important to be candid about staffing changes.
If employees understand the rationale behind the layoffs, they are more likely to accept the decision. Your communication should show the alternatives you have explored and how the reduction is the right course of action right now. Managers who evade questions about layoffs or fabricate stories to soften the blow cause more harm than good, decimating trust and loyalty. Stating the facts helps to address any anxieties that arise.
2. prepare a public statement
Today, news about the reduction in force spreads like wildfire and can jeopardize both your corporate and employer brands. When the news of the layoffs in the company hits, you may need to issue a statement to reassure your customers, employees, suppliers and the public that you are taking action to stabilize the company.
When you’re open about the decision-making process that led to layoffs you restore trust in your company, and your employees are more likely to have confidence in the organization’s future.
Your statement should acknowledge the damage caused, provide a rationale behind the layoffs, and offer solutions to help laid-off workers. For example, when Stripe announced layoffs of 14% of its workforce, the CEO, Patrick Collison, sent a sincere email to all employees offering an apology and acknowledging the steps that led to the layoff. While not every organization needs to do the same, authenticity and empathy can help build trust among both displaced workers and your remaining workforce.
3. take care of exiting employees
How you treat departing employees affects the remaining workers and tells a story about your company's culture. If you treat laid-off workers poorly, your remaining employees will lose trust in the company, and productivity will likely plummet. Taking care of the laid-off workers puts the remaining employees at ease and makes them know you value their contribution to the company. It may also provide reassurance that, if they were also laid off, the organization would take care of them as well.
Aside from offering a regular severance package or extended health benefits for exiting employees, outplacement assistance can provide that added assurance. These services provide displaced workers with the support they need to find new employment opportunities quickly. For instance, expert coaching equips your employees with job search tools for the current market, including a resume that meets contemporary recruitment practices and interview coaching.
Outplacement services not only help exiting workers move on to other careers, but also provide your surviving workforce with the assurance that the organization values its people and wants to see them thrive, even when they’re let go.
4. provide wellness and employee assistance
Focus on employee wellbeing to keep a pulse on engagement throughout the company. Employee wellness programs can boost morale and ensure people are mentally and physically at their best.
For example, educational workshops can help the remaining workers deal with the survivor's guilt that can cause plummeting productivity. Aside from providing counseling and workshops , personal coaching or development programs can help employees visualize and work toward their goals within the new organizational structure.
Surveying your people regularly can help to identify the programs that would benefit them the most, the questions they are struggling with and the new challenges they face as the organization changes. For example, with the reduced workforce, employees will likely be worried about increasing responsibilities or changing roles. Consider their feedback seriously, and create action plans and programs that directly address their struggles.
5. support open dialogue
Open dialogues can minimize any confusion that may be looming after a layoff. It will help if you leverage one-on-one conversations to discuss problems that employees face. After layoffs, address the tough questions from employees about the company's future. Also, seek input from employees on their uncertainties and the issues they want you to address.
Anonymous surveys can also provide your people with the opportunity to share candid feedback, without the fear of retaliation — which is especially important during a time when anxiety is high. You can further build trust and psychological safety by communicating the ways you are taking action based on that feedback.
When you promote open dialogue, remaining employees feel valued and seen by their leaders. When you collaborate with employees, you build stronger relationships and can support them more effectively through the transition period.
Company restructures and layoffs are often inevitable, and you need strategies to avoid loss of productivity and engagement. Large-scale layoffs often lead to low employee morale and higher turnover rates. Low productivity affects profits and your employer brand. Having plans in place to communicate the layoffs and providing outplacement assistance to outgoing employees can revive declining employee engagement.