No matter how seasoned leaders are at their work, downsizing is probably the most dreaded aspect of their role. Cameron (1994) calls this the most pervasive yet understudied occurrence of the business world. It’s not just a challenging strategic decision, but also an emotionally draining one. In spite of doing everything to prevent it, sometimes you have to let go. And as hard it is for the employee leaving, layoffs have a deep impact on the remaining team as well – a phenomenon called the ‘workplace survivor syndrome’.
Studies conducted by the Institute of Behavioral Science show an increase in alcohol consumption, smoking, and workplace injury among layoff survivors. Other studies report depression, plummeting productivity and poor morale among surviving staff, along with the fact that it takes six long years for some layoff survivors to recover from their trauma. When the Great Recession hit between 2008–2011, many companies reported a drop of more than 30% in their employee engagement!
Considering such intensity, the way this change is communicated and carried out can profoundly affect the future of the organization as well as the well-being and commitment of its employees. For, it determines how people perceive the situation. Here are some ways of doing this right.
- Giving employees advance information about the downsizing is highly effective. Research says, this allows time and room for people to process the information, as well as consequences. Such open communication is known to mitigate worker insecurity, and there is little that proves otherwise. Add to this the awareness of the economic climate leading to downsizing, and you would have allayed feelings of anger.
- Implement the Realistic Downsizing Preview (RDP) designed by Prof. Applebaum and Donia from Concordia University, which seeks to elicit positive responses from employees. It aims at introducing survivors to the real climate post downsizing – how their jobs are going to change, how this change could affect them emotionally, and what assistance programs the organization would offer. This helps keep employee expectations low, and increases preparedness. It’s an effort to re-establish the psychological contract and engagement between surviving employees and the employer.
Some elements of an RDP can be:
- Networking opportunities with leaders who have managed such change.
- Counseling or positive mental health trainings.
- Assessment of skills, values and developmental needs.
- Determining personal and professional short term/ long term goals.
- Increased access to career resources and trainings.
- Due to overwhelming emotions of guilt, anger and betrayal that survivors feel, their ability to problem solve and think creatively diminishes. Focus on engaging them with creative challenges – redesigning the organizational culture, building team spirit, or becoming mentors. This allows them to re-build their self-esteem and their trust in the management. Plug in improved recognition efforts for employees who show increased participation, and you’ll sail through choppy waters without much difficulty.
No doubt, downsizing is challenging for an organization. A leader’s primary objective is to manage it with compassion and contain its negative impact on people. Tide over with grace and see the storm clouds blow away. What other approaches do you think can help do this?