The labor market in the U.S. sits in a contradictory position: some organizations are executing or contemplating layoffs even as others struggle to retain staff and fill open positions. The data reinforces this split-screen view of our current economic climate.
Recent data highlights a complex economic climate for HR professionals:
Hiring Difficulty: 62% of HR professionals find it harder to fill positions in 2022 than in 2021.
Layoff Trends: 1 in 4 large organizations have made or intend to make layoffs, while another 25% have discussed the possibility.
Recession Fears: 70% of surveyed professionals are concerned about maintaining staffing levels during a recession.
Jobless Rates: Despite these concerns, August 2022 jobless rates were lower than the previous year in 384 of 389 metropolitan areas.
For those firms that have moved forward with mass layoffs or significant restructuring activities, Survivor's Guilt, defined as the feelings of guilt that occur after surviving a life-threatening or traumatic event when others did not, is a common reaction. Explaining the reasons for layoffs or furloughs is necessary, but not sufficient. Too often, organizations treat layoff communication as a one-time announcement rather than an ongoing process of supporting people through a difficult transition. True change management requires understanding what each person needs to move from their current state to a new reality. Effective organizational communication involves not only proactive communication to employees but also being open to listening to the concerns employees have. Organizations must learn how to effectively listen to and coach employees through any large-scale change if they want to maintain the productivity of the organization and, more importantly, the health and well-being of their employees. This is particularly true in the case of layoffs.
Every layoff shapes an organization's employment brand among both remaining employees and those who were offboarded. Offboarding under difficult economic conditions does not have to damage an organization's employment brand if handled with clear communication and practical support. The best organizations have systems in place, like placement or career coaching, clear communication about benefits and technology transfers, and keeping in touch through alumni and after-lifecycle surveys. When done well, this experience can drive both boomerang rehires and continued referrals to the organization, ensuring that the organization has a healthy talent pool to draw from when conditions improve.
The experience of layoffs or furloughs during the early months of the pandemic was widely shared by employees across the economy. In a Perceptyx study about layoffs, more than 4 in 10 of the employees interviewed were employed by an organization that had some layoffs or furloughs since the pandemic began, with almost 16% of employees experiencing a layoff or furlough personally. Even though many of those employees had returned to old positions or found new ones, the emotional toll of this period remains an all-too-recent memory for most.
During that same period, Perceptyx also examined the effects of layoffs on those who retained their employment by surveying more than 3,000 American adults. Employees who were left behind felt less empowered to make decisions regarding their health and personal life in the wake of layoffs, likely out of concern that they might be next.
Those employees who worked in a department that had layoffs were 50% more likely to say they often worry about their job security. They were also less likely to say that the stress levels at work were manageable than those who worked for an organization where no layoffs or furloughs occurred.
Organizations that begin listening before economic pressure peaks are more than twice as likely to sustain full employee engagement through the downturn. A majority — 6 in 10 — of HR professionals interviewed in Perceptyx’s recent study already understand this and say that gathering perceptions of workplace culture during a recession is more important than during favorable economic conditions. Only 5% of those surveyed say it is less important. HR professionals who plan to listen more during a possible recession are also 2.6 times as likely to say their organizations adapt well to change and 3.8x as likely to report having a highly engaged workforce. A structured approach to managing organizational change depends on clear communication and alignment across all levels of the workforce. If and when a recession occurs, everyone in the organization will be watching how layoffs and other responses are handled, so leaders need to ensure they are listening to all affected.
So if your organization has conducted layoffs this year, or is considering them in the near term, what strategies can you use to support and engage those employees who are left behind?
Lay the foundation for employee and organizational resiliency now, not just when stress is high. Organizations that do the work to support employees before they are stressed will help mitigate negative health effects when the stress comes. Building the resilience employees need to cope with acute stress requires ongoing investment, ideally before a stressor occurs, not in response to one.
Pace work appropriately.
Offer flexible scheduling.
Provide tools and support to help employees handle stressful situations.
Create a psychologically healthy place to work.
Nurture teams that cooperate in dealing with issues or mistakes.Assessing your organization's preparedness for change and identifying gaps in support systems can reveal where to focus first. Empowering employees to make decisions about their health, being a psychologically healthy place to work, and nurturing teams that cooperate in dealing with issues or mistakes will help boost employee morale after layoffs — or other large-scale changes — and increase survivors’ ability to manage workplace stress.
Clearly communicate any workforce changes. Survivors who reported open communication about layoffs and furloughs were more than twice as likely to be fully engaged than those whose organizations did not communicate openly. The same was true for those employees who were able to ask questions to fully understand the changes to the organization. Effective communication goes beyond sharing what happened. Leaders should engage employees in identifying what needs to change and answer the question every person is asking: “What does this mean for me?” This continuous conversation with employees is also important during the regular course of work. Employees are 2.5 times as likely to be fully engaged if their workplace is a safe place to ask questions when they don’t understand a decision and twice as likely to be fully engaged if they can speak up about things with which they don’t agree. This means that the best time to have a conversation is now, whether your organization is contemplating layoffs, struggling to find talent for open roles, or simply operating business-as-usual.
Listening is critical even (and perhaps, especially) in tough times. Employees have important perceptions about all things happening within the workplace, not just during a planned survey time period. That’s why it’s important for organizations to have a comprehensive yet adaptable listening strategy. Successful change management requires understanding what each person needs to move through a transition, and continuous listening is the best way to surface those needs in real time. A comprehensive strategy should reach employees in a variety of ways. However, listening alone isn’t enough: organizations must also use that data for decision-making. When employees report action, they are nearly twice as likely to want to stay, want to be an advocate, and feel pride and motivation to do good work. As reaffirmed by our latest research, organizations that listen (and act) well can see around corners and adapt rapidly to change. A mature listening strategy, supported by a world-class listening platform and people analytics expertise, allows for a rapid organizational response to important topics as they occur, without waiting for planned survey events.
Unmanaged workplace stress takes its toll on employees individually and on the organization collectively. Employees miss work, struggle with productivity, and arrive less well-rested and focused on the task at hand. With research showing that roughly half of all organizational change initiatives are unsuccessful, organizations that build a healthy and engaged workplace when times are good and sustain those efforts when times are tough will reap the benefits of greater retention and productivity. The employees will also benefit, by remaining physically and emotionally fit to contribute to the workforce, their families, and their communities.
Change management is the process of preparing and supporting employees through significant organizational shifts. It goes beyond a single announcement to include ongoing communication, listening, and action. Gartner reports that approximately 50% of all organizational change initiatives fail, which is why organizations need a structured approach to helping employees adapt.
Survivor's guilt after a layoff is the anxiety and guilt employees feel after retaining their jobs when coworkers were let go. Perceptyx found that employees in departments with layoffs were 50% more likely to worry about job security. Common signs include poor sleep, binge drinking, and strained relationships, and if organizations do not address those reactions, the risk of voluntary turnover can increase.
Organizations should communicate early, clearly, and repeatedly while making space for questions. Perceptyx found that open communication more than doubled the likelihood of full engagement, while employees in workplaces where it was safe to ask questions were 2.5 times as likely to be fully engaged and those who could speak up safely were twice as likely to be fully engaged. One-way announcements are not enough.
Employee listening helps leaders catch problems early during change. Perceptyx found that HR professionals who planned increased listening were 2.6 times as likely to report organizational adaptability and 3.8 times as likely to report high engagement. When employees see action on their feedback, they are nearly twice as likely to want to stay, feel motivated, and advocate for the organization. A comprehensive multi-channel listening strategy is what helps organizations turn feedback into better change management outcomes.