5 Strategies for Managing Employees after Layoffs

Retention of talent has become a key strategy for small, midsized and large corporations around the world. Especially in difficult economic times, when layoffs are common practice, it is important that remaining employees feel they are valued, according to a new report.

For the economy immediately following Sept. 11, 2001, the United States Bureau of Labor Statistics reported the highest number of mass layoffs since the bureau began collecting such data. In September 2008, mass layoffs (involving 50 or more layoffs from each employer) reached their highest number since the same month seven years ago. Last month, the U.S. unemployment rate jumped to a 14-year high.

Nigel Gault, chief domestic economist at Global Insight, recently told the New York Times that he expected the unemployment rate "will be near 8 or 8.5 percent by the end of next year." That would be the highest unemployment rate since the early 1980s.

With layoffs and the unemployment rate at their highest levels in over a decade, employers need to prepare themselves for possible post-cutback effects on remaining employees, suggests new research from Sirota Survey Intelligence.

"Sirota Survey Intelligence learned a great deal about the reactions of employees who survive cutbacks by researching the period following 9/11 and its aftermath," Douglas Klein, president of the attitude research specialist, said in a statement yesterday.

According to the results of Sirota's research, employee confidence and attitudes declined in several key areas following the employment situation immediately following September 2001, including the following: job insecurity, higher stress, less teamwork, heavier workloads, less opportunity for advancement and workers generally feeling that they are "less valued."

"By examining the attitudes of nearly 500,000 employees in 2000 (before the layoffs) and in 2002 (post-layoffs), we can illustrate the impact layoffs can have on employees who remain, and offer five guidelines to employers on how to successfully manage survivors," according to Klein.

"During difficult economic times, it's important that employees feel they are valued. Plus, both management and non-management employees are likely to report feelings of guilt, stress and depression during and after layoffs," Klein continued.

Sirota recommends that companies' management take the following actions, in five broad areas, to help mitigate the after-effects of layoffs on employees who remain:

  • Communicate, Communicate, Communicate — "Most employees want to know what will be happening to them, especially whether they will they be laid off. Secrecy or lack of transparency will just add to their sense of powerlessness," Klein said. "Do not delay in confirming whether there will be job cuts. Communicate why workforce reductions are necessary. Employees will understand if the workforce needs to be reduced as a last resort," Klein continued.

  • Allow for an emotional response — "Anger, concern, insecurity, and survivor guilt are all perfectly natural emotions for employees to feel," Klein noted. "It is crucial for managers to spend time assuring employees that it is OK to feel this way. Otherwise, employees may release these feelings in non-productive ways or situations."

  • Proactively address the negative effects of less staff for the same work — "Increased workloads for employees who survive layoffs are inevitable. Often this has the added effect of negatively impacting teamwork during a time when all have to work together to rethink how tasks are done," Klein said. "But managers can choose to involve their employees in the search for solutions, thus addressing both teamwork and efficiency simultaneously." Klein gives as an example gain-sharing and other employee involvement teams, which offer opportunities for employees to "help improve work processes and teamwork while benefiting economically as well."

  • Demonstrate continuing long-term interest in the careers of the survivors — "Following layoffs is a good time to introduce 'stretch assignments' — those that will expand the skills of survivors and demonstrate your confidence in them," Klein advised. "It is also a good time to increase the frequency of discussions about career-related topics, including possible advancement opportunities."

  • Empirically determine how things are going (Don't just guess) — "Management-by-facts is the best way to gauge how employees are performing after layoffs," according to Klein. "Periodic, systematic, employee-attitude assessments enable management to ascertain the impact of their actions on the day-to-day operations of the company. Employee attitude surveys also demonstrate to workers that they are still an important asset. Even if budgets have been cut, an efficiently designed employee survey process can provide critical information for management," Klein concluded.

"While, in general, employees' attitudes will decline in uncertain economic times, there are major exceptions, depending on how management treats workers," Klein said in a September statement, announcing other, earlier findings. "Businesses need to manage through this uncertainty and these business cycles — rather than from within them. They need to adopt strategies — before negative business events occur — that will mitigate the impact of uncertainty on employees.

"Employers need to avoid managing people as expense items in the budget so they can retain workers when times are good — and employees have more career options available to them," Klein said.


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