Change and uncertainty characterizes today’s employment environment and has done for the last decade or so. Organizations have been faced with an increase in global competition and fast moving technological change. Confronted with these pressures, leaders can feel they have little choice but to cut costs in order to remain competitive. As the largest organizational overhead – people are often the first ‘cost’ to be targeted.
Downsizing is instituted as an attempt to improve organizational performance, reduce costs, and become more efficient – yet the reality is that many organizations get caught in a spiral of decline. By concentrating on internal structures and processes, they take their eye off the customer, mission and purpose, leaving no alternative but to cut costs again. By the second or third time, they have destroyed their ability to grow and destroyed engagement. Here are four quick lessons to consider if you are faced with this challenge.
1.Don’t ignore or underestimate the impact on employees
As leaders we tend to think that employees may be overeacting to cuts but research has proven that downsizing can cause significant and emotional reactions. Emotions can vary from confusion, worry, fear, shock to cynicism and stress. Attitudes change with anger and frustration becoming directed towards management and the organization. Employees also change their behavior by reducing discretionary effort, actively job seeking and ‘hunkering down’. Ignoring or glossing over these legitimate reactions prolongs the pain and become debilitating
Manager Tip: Make sure you look for signs of stress, acknowledge emotions and provide survivors with opportunities to share concerns and ask questions.
2. The number of layoffs matters less than how they are done
If your company has a team-based culture, long tenured employees and strong relationships, the number of layoffs you do will not matter as much as the way in which layoffs are done. Employees evaluate the fairness of downsizing by the amount of advance notification, procedures used, transparency of communications and how leavers were treated.
Manager Tip: Take the time to acknowledge the contributions of those who left (whether its 5 or 500), this matters to survivors as it is an indication of future treatment.
3. How you communicate is important
Given that layoffs often occur quickly and with little notification, how communications are delivered is critical. As a leader, ensuring that you deliver messages with sincerity, sensitivity and in the correct format is vitally important. Employees will be evaluating you as a leader and looking to you for guidance on how to handle this change. Remember, the informal communication network is usually working against you and faster than you during layoffs – so frequency and speed of communication is important.
Manager Tip: Nothing can replace face-to-face time with employees during layoffs – do not rely solely on emails or written communications. Make the time to speak directly with employees and more importantly listen. Provide multiple opportunities for feedback – in groups, one-on-one sessions, online and confidentially.
4. Provide clarity of roles and alignment to future goals
One of the biggest causes of negative reactions to layoffs is the lack of clarity. In times of uncertainty employees look for clarity of their role and alignment to future goals in order to sustain their own survival. Layoffs can also cause significant work overload while roles and tasks get reassigned or eliminated.
Manager Tip: Take the time to prioritize tasks for surviving employees, ensure they know how their role fits into goals and their impact on the business. Reinforcing the future vision and how they can contribute will help to rebuild engagement.
Finally, ask yourself if you are equipping your managers with the skills to handle the fallout from layoffs. Managers have feelings too and are having to deal with their own stress while trying to re-engage others. Consider, additional managerial support and guidance through layoffs – additional feedback sessions and even virtual team meetings can help.