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Surviving Layoffs: A Manager's Guide

Jennifer J. Halpern, Ph.D.

 

DO NOT QUOTE OR DISTRIBUTE WITHOUT PERMISSION.

 

Pink slips have become so plentiful, the forced exodus of young, highly skilled employees is starting to look like a ticker-tape parade. According to a recent Techie.com survey, 37% of the over 1500 employees in high-tech-related companies they surveyed have been laid off in the last 3 years. This may very well reflect the national picture.

It is no longer simply the discomfort of "trimming the fat" from an overstuffed organization; many are now cutting to the bone. Managers must deal with those who are left behind: the survivors often have lowered morale, and as a result, lower productivity. In the Techie.com survey, 20% of the respondents felt all jobs are 'temporary'. (In fact, Techie.com is now defunct.)

There are steps managers can take to ease the transition, and to improve morale. It is critical, however, that managers understand what is happening to the individuals who have lost their jobs; to those who remain; and the way in which the survivors perceive different reactions of their company.

Your first instinct may be to run away into the woods for a breather. When you return, consider these guidelines for helping the survivors.

Helping Employees Helps the Bottom Line

This advice is not merely "warm fuzzies". Helping employees feel comfortable in your workplace contributes to good business. Any substantial organizational change event, and the following transition period (such as restructuring, downsizing, mergers or acquisitions) which is not well managed produces a steep decline in employee morale, productivity, and commitment.

This decline has a hefty effect on your bottom line: According to Drake, Beam, and Morin Consulting, the US Department of Labor states that:

  • an individual's normal productivity level can drop by up to 3.6 hours (in an eight hour day) during a major transition. Moreover,
  • 25% of top performers, on average, leave within 90 days of a major change event (good or bad), according to research by the American Management Association.

After a layoff, those survivors whose morale has dropped, who no longer trust the company, or who are angry, may also leave. For some companies, this second wave may even be part of the overall layoff plan. Relying on random departures is not a good idea, however, because the company may lose the people it most wanted to keep.

The layoff may also create problems in attracting new employees:, according to the Techie.com survey, 19% of the high-tech employees they queried will think twice about joining a company that had layoffs. If the word is out that your company handled layoffs humanely, you may be able to recruit the new employees you need later more readily.

 

Post-Change Trauma

To help stem the second wave, it helps to understand what is happening to the people who remain. It also helps to have some idea of how to approach the issues and concerns those who remain will have.

Many of those who weren't laid off probably think of themselves as "survivors" of a trauma—the reprise of which experience seems outside of their ability to control. While you are most likely not a therapist, you can use some psychological insight and techniques in order to help your employees through it.

When a situation is ill-defined or seems chaotic, out of anyone's control (like when decisions are made behind closed doors), people may respond by turning inward and becoming preoccupied with their own needs.

That means your employees may be physically present at their jobs, but their heads are not.

So where are their heads?

 

Not Business As Usual

Few people who have received a pink slip or anonymous layoff email experience a layoff as a cold business decision that has no reflection on his or her ability. Feelings of shame, anger, guilt, and isolation may arise in those who lose their jobs. Self-esteem may plummet, and employees (both the ones who are laid off and those who survived) may blame themselves or their performance.

 

It Could Have Been Me

Many survivors of layoffs are aware that it "could have been me". They may internalize the plight of their colleagues' job loss. (As Diogenes put it, "All things are in common among friends".)

This may include realizations that:

 

It's Just Not Fair

Today's knowledge workers have a keenly developed sense of "fairness" and social justice—some older folk might even say it is too keenly developed. But the point is that they are very likely to be aware of whether another individual was treated equitably in the hiring/firing game, whether or not their colleagues said anything specifically about it.

Some employees may act upon deep feelings of inequity, anger, and distrust: either by acting against the company in subtle ways (e.g., by not giving 100 percent; petty theft, or errors of omission) or not-so-subtle ways (aggressive acts, up to and including violence—though statistically, this is more likely as a reaction from someone who has lost his (or her) stake in the company completely). Others may simply leave, without giving the company an opportunity to explain itself or to rectify the situation.

HrWire reports that the business climate is changing: 20 percent of the high-tech employees surveyed assume that all jobs are temporary. And of those who had been laid of, 33% said the layoffs were the "right business decision". However, 47% believed that control of wasteful spending would have saved jobs.

 

Layoffs and Depression Among Survivors

Some survivors of a layoff may become depressed, experiencing behavioral changes in day-to-day activities, including sleeping , eating, and motivation. An employee who isn't sleeping well isn't likely to be working well, either. Since the company itself was th e source of the depression, the employee is not likely to be able to "leave it behind".

Psychological research suggests that women are more likely than men to blame themselves when things go poorly. On the other hand, men are more likely to act in anger towards others when something goes wrong. Consequently, female employees are potentially more at risk for depression, while males are more at risk for acting out aggressively.

Regardless of gender, surviving employees are likely to spend more time worrying about the situation than thinking about getting their work done. Individuals who come to work unhappy on a regular basis, who develop what psychologists call "negative affect", tend to be less able to make good decision based on integrating facts drawn from different sources, or to solve many kinds of problems. (According to some research, they may be able to focus better than happy people on details: but they can get "stuck" on making those details come out perfectly.)

 

Getting Back to Business: What's a manager to do?

Empathize, Don't Explain

A manager who tries to explain why one person was laid off while another was not will find that rather than clarifying matters, she or he has muddied the waters—and possibly engendered additional resentment.

For some employees, no amount of reassurance will help; post-hoc reassurances may simply be seen as convenient excuses. If layoffs were done in the order of reverse seniority, ("last hired, first fired"), there may be some reassurance that the choice wasn't directed personally; but then the questions start: why was it the last 4 in OUR department who were hired, not the last 3 or 5? And so on.

If performance was part of the equation, it can be hard for some people to accept that it's "just the numbers", since those numbers are often arrived at through a political process.

It is better, therefore, to empathize rather than explain—a task which some managers may find particularly challenging. When your reports come to you, listen to them. Try to see things their way, without badmouthing the company in the process. Comments from the heart, like "I'm really going to miss Rob's horrible jokes" can go a long way. Caring questions about both the laid-off person and the survivors also help. The "reflective listening" technique, in which you repeat the gist of what someone has said to you, showing that you really do understand, can also be helpful: but if you're inexperienced with this technique, this is NOT a good time to start trying it.

 

Slower Exits

Some companies shuttle newly laid-off employees from the premises, occasionally under the watchful eye of a security guard, ostensibly in part to protect against acts of retribution against the company. In many of these cases, the plan may backfire: survivors' negative feelings towards the company are instead likely to increase.

Some executives may think that the quick exit also protects against employees "badmouthing" the company on the way out: but because cell phones and email facilitate all communication , there is no way to protect against negative feedback.

Allow individuals a little time to say good-bye to friends and coworkers. Set aside an office or conference room deemed acceptable for this purpose, and have a secretary or receptionist contact the individuals to whom the person would like to see. If the policy is made in the interest of preserving employees' friendships and dignity, the policy may defuse some of the nasty feedback some executives fear.

Communicate Clearly

Departmental/Divisional Level

Clear, frequent, accurate and timely communication during organizational changes is critical to restoring the organization' effectiveness after the transition. All too often poor communication or miscommunication undermines managers' desires to maintain employee morale and productivity. Executive "secrets" mean that the 'gossip-chain' will kick in, with effects on productivity and commitment from employees that are potentially as disastrous as those of the original layoff.

Like effective advertising campaigns, successful organizational communication efforts require simple, consistent messages that are repeated frequently. While people don't like to talk about layoffs any more than they like to discuss death, it is preferable to air the subject both before and after the layoffs. This way you or your company can answer questions and deal with the factual issues to prevent misunderstandings.

Effective organizational communication alone cannot result in effective organizational change, but it does minimize the doubt and fear that uncertainty can generate.

Personal Level

It can be a prudent investment for managers or executives to bring in a therapist or psychologically-trained facilitator to help the survivors who want such support with their emotional responses to the experience, and for finding productive ways to restore their sense of balance and control. This approach helps both the employee and the organization start over again.

If your company has access to an EAP, encourage a therapist from the EAP to come to your conference room(s) to provide on-site group sessions. Don't expect people to seek assistance just because the EAP is available.

Employees for the most part are not focusing that much on their work anyway, so don't worry about losing productive time; you're not losing any. Do not suggest how employees should be using their personal time, either.

These goals should include sharing coping experiences and reclaiming a feeling of control over one's future.

This cannot be stressed enough. Managers should not be included with their direct reports; facilitators should not report any employee's comments or attitudes to the manager. This is a service for the employees, not a survey for managers.

It is useful, however, if the level and nature of discomfort of the employees can be relayed to the manager, in an anonymous fashion. The "preference statement", moreover, must be relayed, or it loses its effectiveness. To maintain the anonymity of this document, the facilitator should take care to rewrite the statements in his or her own words.

Reducing Fear about Possible Future Layoffs: Ostrich vs. Wrangler

Sticking your head in the sand isn't going to prevent future layoffs, and it won't keep your best people on the job. So take the bull by the horns, and deal with the unpleasant issues clearly and honestly.

Honesty is the best policy. If there is any possibility of layoffs in the near (6-12 months) future, be up front about the possibility.

Keeping employees informed of economic threats to the organization and of contingency plans helps employees trust you. If your company is seen as a good place to work because it treats people well, those people are likely to do everything they can to make the company work. Your good people will stay on the job, and focused on their work.

Know your employees' preferences. If it is at all possible to use ideas developed by survivors in their "layoff preference statement", do so, and make sure everyone knows that their input was valued. If your employees didn't participate in a session of this type, it is probably worthwhile calling a meeting to develop a similar statement. Again, consider using a facilitator, and keeping the contributions anonymous.

Create defensible, reasonable policies. If you are an executive, press for reasonable cost-cutting policies. Perhaps it is possible to make salary reductions, unpaid leaves, or other creative solutions rather than outright layoffs the next time. If not, encourage the development of a reasonable, defensible policy for deciding who will be cut if worse comes to worst.

Have information ready. Create packages with information that can help ease the transition:

The packet should also list information about such concerns as:

The packet should be given to everyone. This will help alleviate the sense that those who lose their jobs somehow fell into a deep chasm with no support mechanisms.

 

Mopping Up

Bloody, unintended aftermaths to layoffs can serve as a wake-up call for an organization. It may be time to reconsider the way in which the organization's infrastructure operates. A quick, but by no means exhaustive, checklist asks whether your company has:

Ironically, companies who talk honestly and openly about job layoffs are more likely to develop loyal employees than those who tuck their heads in the sand. Employees prefer organizations that show they care over those who think that wishful thinking will protect them.

 

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Sources:

  1. HRWire March 19, 2001, Timothy Pajak. http://www.hrwire.com
  2. Information regarding what should be included in information packets from: http://www.workingwoman.com (Retrieved June 2001.)

Copyright 2001 ZevGroup. Further information about the contents of this report is available upon request from Jennifer J. Halpern, Ph.D.