Layoffs Alone Can't Save Your Business- Focus On The Remaining Staff
Since our current recession officially started in December
, 2007, more than 40,000 employees have been laid off by US organizations as part of their overall strategy to improve shareholder value through cost cutting and profit increasing measures. Unfortunately, studies over the past two decades have shown that most of the time layoff initiatives rarely actually achieve those objectives. Rather, the studies have shown that less than 50% of organizations that cut staff and employees actually increase their earnings, and about a quarter of those companies realize a decline in profits instead.
Why don't layoffs produce the returns executives hope they will? It's the people factor. Employees are emotionally and psychologically traumatized by layoffs. At a time when it's critical for employees to be engaged and productive, they are demoralized, fearful, and distrustful. That doesn't add up to a recipe for business success.
My colleague, Deanna Banks, Ph.D. and I spent the past six months studying what leaders can do to re-energize their workforce after layoffs. We discovered that some leaders succeed more than others at helping employees recover from the trauma caused by downsizings.
What Not to Do
As we interviewed employees from companies that had layoffs, we often heard stories of management teams that took action to stifle any expression of emotion. One company even forbade employees to "congregate" in hallways, offices, and coffee break areas. Rather than understanding and dealing with the outrage their people are feeling, some leaders simply want people to get over it, now. They say "Just accept it and move on."
It is a fact that in highly emotional situations such as that caused by a layoff, people can't just shake it off and move on. It is critical they are given the chance to mourn for a period, share their concerns and frustrations, and work through the confusing emotions they are experiencing. If management tries to rush this process and stifle the concerns the employees are expressing, the situation will only become more turbulent.
What To Do
Whenever a layoff takes place, everyone involved is forced into a state of disruptive change. Most researchers agree that people's emotional responses to change follow a fairly predictable pattern.
It is impossible to speed up the process and force people to skip ahead in the emotional healing process resulting from downsizing. You may be over it and ready to forge ahead, but your staff won't support you in those efforts until they are ready. Rather than pushing people to move forward before they are ready, you should be focused on working with your staff to successfully move steadily through the normal cycle of change and progress.
Interestingly, we discovered that the best strategy for helping employees recover from layoffs is one where the manager actually matches his or her actions to the emotions employees are experiencing. This does not mean mirroring the employee's emotion (for example responding to anger with anger). Rather, this means understanding what need is underlying the employee's behavior and meeting that core need so the employee is able to move on.
Our research found that strong leaders:
1. Reduce shock by increasing communication.
2. Acknowledge anger with consideration and attention.
3. Answer anxiety by being clear and concise.
4. Minimize distress and sorrow by being supportive and open.
Emotionally supported employees are better able to put the downsizing aside and re-commit to their job duties. Rather than being cautious and suspicious, they will trust you for future direction. Rather than ending up stalled creatively, they will be more able to take control of their emotions and begin producing and taking necessary risks.
While there's no magic antidote to the effects of a downsizing, how you approach the layoff, how you treat the laid off employees and how the remaining staff is supported will make a big difference in the ultimate success of the company.
by: Wendy Mack
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