Between December 2007, the official start of the current recession, and June 2009 more than 40,000 U.S. organizations held layoffs in an effort to reduce costs, increase profits, and improve shareholder value. Ironically, research over past the twenty years indicates that most layoffs fail to achieve these objectives. In fact, studies show that less than half of the companies that downsize see increases in profits whereas twenty-five percent actually see profits decline.
Why isn't downsizing as effective as senior management hopes? In short, it is the effect on the employees left behind. Remaining staff are affected both emotionally and psychologically by a downsizing effort. At the very point in time when employees must be fully functioning and able to take over the tasks of those who were laid off, they are unnerved, frightened and skeptical. Those qualities are not what a company needs to be successful.
I have spent the past 6 months researching with my colleague, Deanna Banks, Ph.D. to try to establish what senior management can do to inspire their employees to action after a downsizing. We found that some leaders were more successful than others at enabling their employees to bounce back after the upheaval caused by layoffs.
What Not to Do
Many employees we interviewed told stories of managers attempting to extinguish any opportunities for the remaining staff to express their emotions resulting from a layoff. One example went as far as a ban on employee socialization at coffee breaks, or in hallways and offices. It is a common desire among senior management that their employees "get over it", and the sooner the better, and they don't understand or make any provisions to deal with the anger, frustration and fear their employees are feeling. Their solution is to move on and accept that it is what it is.
The truth is that when emotion grips people, they simply can't move on. They need time and opportunities to vent their frustrations and process their emotions. The more management attempts to repress their employees' concerns and rush them back to business as usual, the more angry and upset their employees will be.
What To Do
Downsizing results in a state of unsettling change. However, nearly all experts in the field agree that the response to such change will follow a very foreseeable pattern.
If people on your team are suffering through emotional reactions to layoffs, you can't force them to skip ahead. You may be ready to charge the hill, but they won't rally behind you. Rather than trying to get people to immediately move forward, your job is to help them progress through the normal cycle of change.
It was interesting to discover that the best approach to help staff members recover from a downsizing is for the manager to adjust his actions to correspond to the emotions the employee is feeling. The objective isn't to imitate the person's emotion (e.g. respond to frustration with frustration). Instead, the manager should try to understand what emotional need the employee needs met based on their behavior, and attempting to meet that need so that the employee can continue the healing process.
In our research, we found that successful leaders:
1. Increase communication to minimize shock.
2. Express concern when faced with anger.
3. Deal with anxiety by being very clear in their explanations and communication.
4. Minimize distress and sorrow by being supportive and open.
Employees who are emotionally supported are likely to be able to refocus on their job and maintain commitment to it. Instead of feeling miserable and distrustful, they will look to you for guidance. Instead of stagnating in hopelessness, they will be much more likely to use their creativity and take risks.
It's true that there is no magic cure to successfully survive a downsizing, however, the chance of a company's ultimate success can be highly improved through the method in which the layoff is approached, how those staff members let go are treated, and how management supports the surviving workforce.
Why isn't downsizing as effective as senior management hopes? In short, it is the effect on the employees left behind. Remaining staff are affected both emotionally and psychologically by a downsizing effort. At the very point in time when employees must be fully functioning and able to take over the tasks of those who were laid off, they are unnerved, frightened and skeptical. Those qualities are not what a company needs to be successful.
I have spent the past 6 months researching with my colleague, Deanna Banks, Ph.D. to try to establish what senior management can do to inspire their employees to action after a downsizing. We found that some leaders were more successful than others at enabling their employees to bounce back after the upheaval caused by layoffs.
What Not to Do
Many employees we interviewed told stories of managers attempting to extinguish any opportunities for the remaining staff to express their emotions resulting from a layoff. One example went as far as a ban on employee socialization at coffee breaks, or in hallways and offices. It is a common desire among senior management that their employees "get over it", and the sooner the better, and they don't understand or make any provisions to deal with the anger, frustration and fear their employees are feeling. Their solution is to move on and accept that it is what it is.
The truth is that when emotion grips people, they simply can't move on. They need time and opportunities to vent their frustrations and process their emotions. The more management attempts to repress their employees' concerns and rush them back to business as usual, the more angry and upset their employees will be.
What To Do
Downsizing results in a state of unsettling change. However, nearly all experts in the field agree that the response to such change will follow a very foreseeable pattern.
If people on your team are suffering through emotional reactions to layoffs, you can't force them to skip ahead. You may be ready to charge the hill, but they won't rally behind you. Rather than trying to get people to immediately move forward, your job is to help them progress through the normal cycle of change.
It was interesting to discover that the best approach to help staff members recover from a downsizing is for the manager to adjust his actions to correspond to the emotions the employee is feeling. The objective isn't to imitate the person's emotion (e.g. respond to frustration with frustration). Instead, the manager should try to understand what emotional need the employee needs met based on their behavior, and attempting to meet that need so that the employee can continue the healing process.
In our research, we found that successful leaders:
1. Increase communication to minimize shock.
2. Express concern when faced with anger.
3. Deal with anxiety by being very clear in their explanations and communication.
4. Minimize distress and sorrow by being supportive and open.
Employees who are emotionally supported are likely to be able to refocus on their job and maintain commitment to it. Instead of feeling miserable and distrustful, they will look to you for guidance. Instead of stagnating in hopelessness, they will be much more likely to use their creativity and take risks.
It's true that there is no magic cure to successfully survive a downsizing, however, the chance of a company's ultimate success can be highly improved through the method in which the layoff is approached, how those staff members let go are treated, and how management supports the surviving workforce.
About the Author:
Wendy Mack is a experienced advisor, trainer, and author with a focus in leading and communicating change. Contact Wendy at, or get her free e-book, Transforming Anxiety into Energy at www.WendyMack.com.
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