More than 40,000 employees have been laid off by U.S. organizations between December, 2007 (the official start of our current recession) and June, 2009, in an attempt by companies to cut costs, improve profits, and shore up shareholder value. However, it is ironic that studies conducted over the past 20 years have repeatedly reported that layoffs do not usually produce those results. Instead, these studies have reported time and again that less than 50% of the companies using downsizing as a cost cutting and profit increasing measure actually achieve that objective; in fact approximately 25% actually realize a decline in their overall profitability.
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.
My colleague, Deanna Banks, Ph.D. and I spent the past six months studying what leaders can do to re-energize their workforce after layoffs. We discovered that some leaders succeed more than others at helping employees recover from the trauma caused by downsizings.
What Not to Do
As we interviewed employees from companies that had layoffs, we often heard stories of management teams that took action to stifle any expression of emotion. One company even forbade employees to "congregate" in hallways, offices, and coffee break areas. Rather than understanding and dealing with the outrage their people are feeling, some leaders simply want people to get over it, now. They say "Just accept it and move on."
The reality is that in high emotional situations such as a downsizing, people can't just bury it and move on. It is critical they are provided the liberty to share their concerns and work through the emotions they are feeling. If management attempts to rush the employees through this mourning process, the employees will become even more frustrated, angry and bitter.
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.
You can't force your employees to move ahead in their cycle of healing faster than they are ready to. You may be over it and ready to move on, but until your employees are as well, you won't have a support system to help. Your job, rather than to push for progress sooner than they are able, is to help them progress at their own pace through the change process.
I found it interesting to learn that the best tactic a manager can take is to match his or her actions to the employee's emotions. However, this does not mean that the manager should respond to an employees emotion with the same emotion (e.g. resentment with resentment). Rather, the manager's goal is to distinguish the underlying need that the employee is communicating with their behavior, and do his best to meet that need, which will allow the employee to move on.
Our studies discovered that those leaders who are successful:
1. Increase communication to minimize shock.
2. Respond to anger by expressing concern.
3. Answer anxiety by being clear and concise.
4. Use supportive behaviors to minimize hopelessness and grief.
Emotionally supported employees are better able to put the downsizing aside and re-commit to their job duties. Rather than being cautious and suspicious, they will trust you for future direction. Rather than ending up stalled creatively, they will be more able to take control of their emotions and begin producing and taking necessary 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. - 31963
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.
My colleague, Deanna Banks, Ph.D. and I spent the past six months studying what leaders can do to re-energize their workforce after layoffs. We discovered that some leaders succeed more than others at helping employees recover from the trauma caused by downsizings.
What Not to Do
As we interviewed employees from companies that had layoffs, we often heard stories of management teams that took action to stifle any expression of emotion. One company even forbade employees to "congregate" in hallways, offices, and coffee break areas. Rather than understanding and dealing with the outrage their people are feeling, some leaders simply want people to get over it, now. They say "Just accept it and move on."
The reality is that in high emotional situations such as a downsizing, people can't just bury it and move on. It is critical they are provided the liberty to share their concerns and work through the emotions they are feeling. If management attempts to rush the employees through this mourning process, the employees will become even more frustrated, angry and bitter.
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.
You can't force your employees to move ahead in their cycle of healing faster than they are ready to. You may be over it and ready to move on, but until your employees are as well, you won't have a support system to help. Your job, rather than to push for progress sooner than they are able, is to help them progress at their own pace through the change process.
I found it interesting to learn that the best tactic a manager can take is to match his or her actions to the employee's emotions. However, this does not mean that the manager should respond to an employees emotion with the same emotion (e.g. resentment with resentment). Rather, the manager's goal is to distinguish the underlying need that the employee is communicating with their behavior, and do his best to meet that need, which will allow the employee to move on.
Our studies discovered that those leaders who are successful:
1. Increase communication to minimize shock.
2. Respond to anger by expressing concern.
3. Answer anxiety by being clear and concise.
4. Use supportive behaviors to minimize hopelessness and grief.
Emotionally supported employees are better able to put the downsizing aside and re-commit to their job duties. Rather than being cautious and suspicious, they will trust you for future direction. Rather than ending up stalled creatively, they will be more able to take control of their emotions and begin producing and taking necessary 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. - 31963
About the Author:
Wendy Mack is a professional consultant, mentor, and author focusing on leading and communicating change. Contact Wendy at, or Download her free e-book, Transforming Anxiety into Energy at www.WendyMack.com.
