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How To Ensure a Rapid and Effective Recovery From Layoffs
Lattice’s 2024 State of People Strategy Report found that the wide majority of HR leaders believe it takes up to a year for employee morale and productivity to bounce back after a layoff. In contrast, C-suite teams mostly expect a full recovery within three months.
Most HR leaders surveyed agreed that their C-suite does not provide enough support for addressing low morale (59%), training managers on how to talk about layoffs (62%), or redefining roles (63%). Lattice wrote in the study, “Without support from the C-suite during such a turbulent time, people teams are even less empowered to reach their goals and drive the kind of impact that could help keep the business afloat.”
Employees recognize that layoffs are often unavoidable in an economic downturn or when business conditions demand a shift in strategy, but how they are handled can not only help revive the morale of the remaining workers who often have to take on extra tasks but also the company’s reputation and hiring ability going forward.
In an interview with the Wall Street Journal, Paul A. Argenti, professor of corporate communication at the Tuck School of Business at Dartmouth, recommended that managers be as transparent as possible with employees about business conditions so no one is surprised when layoffs are announced.
Amii Barnard-Bahn, a partner at Kaplan & Walker and the CEO of Barnard-Bahn Coaching & Consulting, said exiting employees should be thanked and shown compassion, and remaining employees should be shown a “compelling” path forward and have an opportunity to ask questions. She said, “Healing takes time, patience, and persistent effort. Think of every conversation as an opportunity to re-recruit those who stay.”
Employees will be looking for clarity about their role and whether more layoffs are potentially coming.
Stacey Berk, founder and managing consultant at Expand HR Consulting in Maryland, told SHRM, “The CEO can start managing the aftermath of these changes immediately with a strong all-staff communication followed by various staff meetings, depending on how widely dispersed employees are by location after the layoffs have taken place.”
Aaron Rubens, co-founder and CEO of Kudoboard Inc., a workplace appreciation platform, wrote in a column for HRMorning that beyond worries over their job and their employer’s viability, remaining employees are frequently plagued by survivor’s guilt about keeping their jobs while their colleagues and friends lost theirs. The guilt keeps them disengaged at work.
Rubens stated, “When employers are very clear with the remaining staff about why they were selected to keep their jobs, it can help corporate survivors feel less guilt. This is particularly true if managers pair this with authentic workplace recognition for accomplishments and provide opportunities for peer recognition and communication in the wake of layoffs.”
Discussion Questions
What mistakes do companies often make when announcing layoffs?
What should the ground rules be for companies conducting layoffs?
Poll
Loading …BrainTrust
Doug Garnett
President, Protonik
Patricia Vekich Waldron
Contributing Editor, RetailWire; Founder and CEO, Vision First
Layoffs can severely sap morale. They also cause worry as everyone wonders whether they will be next. If redundancies are essential then companies should expect a hit. However, by communicating openly – explaining why the layoffs were necessary and how they fit into a wider strategy – can reassure. Companies also need to share positive news – highlighting growth activities for example – so that the focus isn’t just negative.
The survey of executive attitudes shows a very concerning idea: “training managers on how to talk about layoffs.” The only reason training could be needed is that managers were not sufficiently involved with “why” the layoff was needed. There’s no way to “train” managers to talk in useful ways about things they are not involved with.
I’m reminded of a CEO of an operation owned by a big tech company. When that company closed the operations, despite the CEO having long-term relations with his key employees the tech company handed him a script and ordered him to read the script in talking with them.
Success requires starting by understanding we are talking about humans — whether managers, those leaving, or those staying. Only by embracing their human-ness can we ease the recovery from layoffs.
Could not agree more.
Having an econ background I’m thinking the best thing a company can do is have a generous severance program (of course that takes money, which is typically something companies laying people off don’t have a lot of). I’d also question the phrase “survivor guilt“: I think “survivor fear” – that they may be next – is a better description (Indeed, a contrarian might wonder if “don’t be next” might serve as a motivator for remaining employees to work harder.) Beyond these (rather obvious) points, it’s hard to set up fail-safe rules; companies in industries that seem in perpetual decline often have semi-formalized processes, like voluntary buyouts, that seek to minimize negative impacts, but I doubt that’s practical in businesses where the vast majority of employees have limited tenure…not to mention the inherent conflict between saying one thing – “things will get better” – while seemingly planning for the opposite.
It will take time and space for your team to process their emotions. They will probably pay extra attention to how things are communicated as well as what is said to those who were laid off. Trust me, they will hear about it. Train your remaining managers, or get proper training for them, to handle the situation as humanly as possible. Make sure your managers don’t hide behind email.
What is the worst thing you can say to an employee? “It’s not personal.” How can it be anything else? Any job loss is stressful. Make sure neither you or your managers blow it off because everyone in the company, past and present, will be sensitive to how this comes down. The “how” is very important.
Don’t rush. Listen attentively. People should know you’re sad too, since you care about the laid-off workers as well as the ones who are staying. Of course, don’t break down. Stay strong.
You should do whatever you can to help your downsized team members find new jobs. There are many things you can do to help, mentor, teach, and make recommendations. Taking this step will go a long way toward building trust and loyalty with those who remain after the layoff. Not everyone has been taught how to network, or even how to use LinkedIn, online job sites, or how to write a digital resume.
Remind your remaining high-performers how much they are valued. Downsizing is undoubtedly stressful, especially when it involves strong contributors in the wrong chair at the wrong time.
You and your management team need to look for time spent on rarely reviewed reports or redundant processes. The same work can’t be done with fewer people for long without sacrificing quality or burning out. Take a serious look at what can be discarded. Db
Layoffs may start with the prevailing math of the situation. Something in the sales and expense equation has to give. It is then immediately about people and their careers and their lives. And it’s not as simple as eliminating jobs and consolidating tasks. It’s imperative that the right mix of people stay. The mix of people who will be able to regroup and form a new team dynamic. That may mean some new cross training and new working relationships. It’s not just math. It’s a new team dynamic.
Remember when layoffs signaled a downward spiral? While that can still be the case, layoffs are seen as an inevitable cycle in many large corporations these days. However, when leaders buy into that business-as-usual thinking, morale can indeed plummet. The article makes excellent points about the need for proactive and clear communication before, during, and perhaps most importantly, after layoffs occur. Leaders need to overcompensate in the wake of major layoffs to maintain equilibrium. The last statement by Mr. Rubens is a bit dicey. Telling remaining employees why they kept their jobs can create an “us and them” mentality, not to mention providing fodder for any future wrongful termination claims.
I think perhaps the more important question might be “How do we avoid having layoffs in the first place by more effectively managing our business strategy, organizational design, and staffing?” Simply accepting the inevitability of layoffs, instead of investigating the root cause of them, is the real leadership question that should be asked in my view.
Also, we should be asking about the efffect on the people who were impacted…not just the organizational impact.
You are so right. I never understood mass layoffs. What were those people doing the day before? If you don’t need them today, why did you need them yesterday?
The problem is that large companies just keep hiring and hiring and never rationalize their workforce. There should be a regular churn. It should never get to the point of shaking the company to the core.
This depends on the culture of the company. If the culture is caring, with respect for associates, it will take a long time to recover. In a competitive culture where associates have opportunities outside of the company they are currently employed at then a layoff has a smaller effect on morale. People shrug and move on. That does not make a round of layoffs easier to get over by the way.
In the larger picture a round of layoffs is a fail on the part of management, because it means you hired too many people to begin with, or you hired to support a level of business that did not happen, or you spent $ on other items that did not provide the return expected or some other “miss” in terms of the capacity you have in people talent.
CEOs don’t realize that the workload doesn’t change when there are layoffs. This, along with the morale damage, significantly impacts individuals that are laid off, those that remain, and the overall organization.
A poorly planned layoff or RIF will be wrought with critical mistakes. Lack of clear, and regular communication may be the biggest mistake of them all. If layoffs are communicated abruptly or without adequate explanation, it can lead to mistrust among remaining employees. They may feel anxious about their job security and skeptical about the leadership’s transparency and intentions. Another mistake is neglecting the impact on remaining staff. If those who stay see their departing colleagues treated without respect or adequate support, it will lower morale while damaging the perception of the company as a caring employer. An approach to conducting layoffs in must consider several key practices:
Clear and Continuous Communication: Start with transparent explanations about the reasons for the layoffs and the criteria used to make decisions. Continue to communicate regularly to address concerns and provide updates on the company’s status and future plans. Communication is not a one and done procedure.
Visible Leadership: Leaders should be actively involved throughout the process, showing empathy and support. Their presence can reassure employees, affirming that leadership is attentive and committed to the company’s values and its people.
Support for Departing Employees: Offering the fairest severance packages within the businesses means, consider outplacement services, and other support measures. This shows remaining employees that the company respects and cares for its workforce, which can help maintain morale and trust. Not to mention, it is the right thing to do.
Focus on Employee Well-being: Post-layoff, it’s crucial to support the remaining team’s emotional and professional needs. Initiatives could include career development opportunities, mentoring and opportunities for transparent discussions about new roles and responsibilities based upon the layoff addressing how to get the work done are important steps.
In recent year, we have heard and read stories where leadership failed to realize once the layoffs were complete that there needed to be a process designed to build back relationships, mission and engagement. It will take some time before it will be business as usual