Layoff survivors: the few, the fatigued, the forgotten
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The consulting firm Leadership IQ has just finished conducting a study of layoff survivors. Here's their advice: "Don't Expect Layoff Survivors to be Grateful." Here's a bit more detail.
"If your company is undertaking a layoff, be forewarned: Your surviving employees are not going to work harder out of gratitude. According to a new study by Leadership IQ, 74% of employees who kept their job amidst a corporate layoff say their own productivity has declined since the layoff. And 69% say the quality of their company's product or service has declined since the layoffs. Leadership IQ, a leadership research and training company, compiled these results after surveying 4,172 workers who remain employed following a corporate layoff. These subjects were drawn from 318 companies that have undertaken layoffs in the past 6 months. Employees were asked questions about productivity, product quality, workforce issues and management effectiveness. "
It's good to have this kind of study because there's a school of thought that believes that the opposite is true. They think that layoff survivors will be so grateful to have a job that they'll work harder than ever.
That's just not so. Here's the reality from my free white paper, "Managing Headcount in a Downturn" and my discussion with Wayne Turmel on The Cranky Middle Manager.
Once you've done the layoffs you need to care for the survivors. They will certainly experience some grief. They may also still fear the loss of their own job.
A study by Cigna and the American Management Association found that surviving workers had a drastic increase in medical claims, including mental health, substance abuse, and cardiovascular issues. EAP firms report a drastic increase in calls after layoffs, many of them from managers seeking help dealing with their team members.
Survivor guilt is inevitable. If people have worked together long enough to be friends it's inevitable that those still there will ask themselves why they stayed and their friend is gone.
Workload issues are almost always part of the mix. Even if a drop in the workload is the reason for layoffs, most teams find that workload issues are still a concern. This can be aggravated when workers are moved to different assignments or asked to pick up the work of their laid-off colleagues.
Morale can be counted on to drop. Managers report that, after a layoff, employees often more time online and making personal phone calls. Conversations are likely to focus on their fate and the fate of the company. Minor infractions like coming in late and extending break times usually increase.
The manager’s role is a delicate balancing act. On the one hand the manager needs to be a positive role model. On the other, being too cheerful may lead team members to see their boss as a tool of management or just a jerk.
Of course productivity will decrease! Everyone is waiting for the ax to fall! There's been a lot of coverage in the NY Times and the blogosphere on alternatives to layoffs (increasing employee shares of health insurance costs, relocation to a more affordable office space, etc.)
Wonder how many corps. are actually exploring those options?
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Thanks for stopping by, Hayli. I think that looking for alternatives to mass layoffs is baked into the culture before the hard times hit. The companies that find alternatives to mass layoffs seem to do three things. The most important is that they don't see the alternatives as "alternatives." They see them as cost cutting measures. If they don't work, then there's another cost cutting measure called layoffs.
The other two important things are that the companies who do things besides layoffs begin with the idea the maintaining an intact workforce, not cost cutting is the primary objective and they involve their workers in finding other ways to cut costs.
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PLEG Syndrome (Post-Layoff Employment Gratitude) is indeed a myth. The good ones left standing are polishing their resumes like any responsible person should. I would however want to delve deeper into the Leadership IQ study before drawing conclusions. It looks like the only thing the 318 companies had in common is that they did a layoff, but HOW they did it was probably a key driver of the attitudes of the survivors. In the current economy, where employees in every company are wondering when the axe will fall, I'd argue that the layoff itself is [almost] a foregone conclusion. The questions on employees' minds (other than when and how many) are "Will our CEO and his/her staff face the workforce before/after the cuts? Will those impacted be treated with dignity? Will we have a chance to wish them luck and exchange contact info, or will they be escorted out of the building like criminals?"
From my experience (having done this a few times, once in the past few weeks), how you treat the departing employees is the biggest factor in the post-layoff morale. I can't say this strongly enough. If the survivors see that their leaders can take the tough action when necessary, yet treat people with compassion and dignity in the process, then they can go through the normal mourning process and move on. When it seems like we're trying to be "stealthy" or we show mistrust for the departing employees, then the impact can be lasting and negative.
And by the way, when you're the one laying folks off then treating them well in the process can help your own peace of mind afterward, as well.
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Great comments, Dave. Leadership IQ's surveys are not the sort to draw deep conclusions from, but they ask good questions and they usually have a pretty good sized panel providing responses.
On the factors affecting post-layoff morale. There are two things that make a big difference. You mentioned one: how you handle the layoff that the people survived. The other is your individual boss and how he or she acted and acts.
Hope you'll stop by again.
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This is a very important topic. Thanks for taking it on and reporting on the research!
I've shared this post with my readers in my weekly Rainmaker 'Fab Five' blog picks of the week which can be found here: http://www.maximizepossibility.com/employee_retention/2008/12/the-rainmaker-3.html
Be well Wally!
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Layoffs, at best, produce only short-term improvement. At the risk of creating severe damage. Like a crash, starvation diet - the health risks outweigh the short-term gain. Instead, businesses need to change what they do to be more competitive - and that involves applying innovation - rather than focusing on cost cutting. Read more at http://www.ThePhoenixPrinciple.com
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Thanks for stopping by and sharing that, Adam. Your analogy is a good one.
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People always hate to talk about when they are laid off. But as it has become every day's news headline since Yahoo started it with cutting 1500 of its task force last year, now a need of platform has been in demand where people can express their selves in words how they are feeling about their company, whey the got laid off was that justified or not.
And every thing they want to tell anonymously.And www.layoffgossip.com is providing you that platform.
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I have a very close friend, who graduated from Harvard. Worked for ML for over 8 years, recently he’s been “right sized” too, despite of his outstanding performance and the increasing revenue he generated. OMG, now the banking industry is badly hurt, how long it would take for those financial background guys like him get back to the job market. Banking jobs are not there as much as before as easily seen on http://www.joboutlets.com and other job sites in the region
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Thanks for adding that perspective. I have a coaching client right now that's in a similar situation. He's been looking for jobs that use related skills but outside the financial sector. He's interviewed for research and business intelligence positions, but at far lower salary and bonus than he had with his previous employer.
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I like this line:
Once you've done the layoffs you need to care for the survivors. They will certainly experience some grief. They may also still fear the loss of their own job.
You should probably say, "The chances are great that this will happen again. No job is permanent." Let's have a little honesty. One layoff doesn't mean the problems are fixed.
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You're right, Laurie. Historically companies rarely make do with only one round of layoffs.
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