VIEWPOINTS : After the Layoffs Are Over: Easing Survivors’ Pain
Most firms do a good job of providing a safety net to employees they lay off through outplacement counseling, severance pay and extension of benefits. Yet they don’t always look at the tremendous psychological effects that layoffs have on the surviving employees. Failing to deal with these survivors can be disastrous and can undermine the benefits of downsizing.
Often, survivors feel guilty for being spared. They may become depressed at their inability to control or avert future layoffs. They even develop psychosomatic stress reactions such as increased smoking, drinking and sleeplessness. In the short run, surviving employees are distracted from doing their jobs and productivity plummets. Over the long haul, employees who have been through a downsizing or witnessed layoffs have considerably less confidence and trust in their employers.
The norm in most organizations is to get the downsizing effort over as quickly as possible. Terminations are painful to execute, and no one wants the dirty work to linger. Everyone is doubly busy in a downsizing, attempting to keep the business running while managing the reductions.
There is a classic pattern of mistakes made by many employers as they begin to step up their response to bad economic news. As their profits erode and they lose market share, employers frequently worry first about the investment community and focus their communication efforts externally rather than internally. Likewise, when executives search for creative solutions to company business problems, the leadership too often declines to discuss options or offer any kind of outlook for the future. Instead, company leaders lower their profile with their own employees as they grope for the right strategy or combinatioN of actions.
The result is nervous employees who believe that management is either insensitive to their plight or fresh out of ideas. When the leadership finally is ready to talk about recovery and revitalization, their past behavior has earned them an insecure work force more inclined to look for another job than to stay around and help renew the company.
As unpleasant and demoralizing as downsizing actions are, there are ways to ease the pain. Following the acquisition last year of a major competitor, Mike Pickett, chief executive of El Segundo-based Merisel Computer Products, was upfront with employees that business conditions would require the elimination of some positions. He acknowledged the human side of the transition and gave employees a realistic picture of the tough times ahead, rather than the conventional sugar-coated statements “that nothing else will change.”
Pickett talked to employees as if they were Wall Street analysts, successfully selling them on the business rationale for the reductions and persuading them of the business opportunities available once the firm became a “leaner warrior” in the marketplace. He then brought the message down to a personal level, letting employees know how they could prosper along with the company.
Pickett and his senior vice presidents devoted considerable time “overcommunicating” by visiting all the company locations and by creating videotapes and newsletters. Informal visits to employees were also effective; never did “managing by walking around” pay bigger dividends for Merisel’s leaders. Employees experienced all the wrenching psychological symptoms of surviving a layoff but also felt that their leaders had leveled with them and took solace in seeing that their leaders were mapping a course for a successful future.
While senior executives set the tone, middle managers make or break a regrouping effort. Middle managers played a key role in the successful business results of Molson Breweries of Canada following its downsizing last year. To soften the blow, Molson offered a generous severance package to layoff victims. Envious of these victims who walked away with fat checks, surviving employees felt like they were the losers and were angry at the prospect of having to work even harder in the downsized organization.
Molson conducted workshops that showed managers action they could take to lessen employees’ undesired reactions (such as downturns in productivity) and to manage their own stress. The sessions also provided time for managers to create strategies for identifying and implementing new and better ways of organizing work. Managers jumped at the opportunity to put their own mark on presenting and implementing initial plans in their departments. The workshops raised the confidence of the middle managers; they went back to their employees knowing that they could lead their teams through rough times.
Regrouping efforts must extend to all employees. Initially, programs need to help the surviving employees work through and let go of the trauma of mass layoffs. Toronto-based Imperial Oil beefed up its employee assistance programs late last year in anticipation of rising employee stress following its downsizing announcement.
Following layoffs at an airline, surviving employees were invited to voluntary “rap sessions” to share their feelings. Facilitated by outsiders to ensure confidentiality, these sessions allowed some employees to speak their feelings about how unfair they felt the cuts in staff were. Others simply listened and vicariously vented their concern. Soon, however, the sessions evolved from forums for “beating up” on management to support sessions that helped employees learn from one another how people were experiencing and coping with the stress of mass layoffs. False rumors of further cuts were aired and rebuffed. Also, employees recognized that such rap sessions were the exception in corporate America and appreciated that their management endorsed the sessions.
Letting go of the trauma eventually needs to give way to accepting the new organizational order. The more that employees are involved in the regrouping efforts, the more they are going to feel like architects of change rather than victims of change.
There are many ways to enhance hands-on employee participation in a regrouping. DuPont in 1988 established a program using the concepts of “quality circles” to identify ways of working smarter with fewer employees. A percentage of money saved from the downsizing was earmarked to reward employee suggestions for getting more done with less. This was a tangible sign to employees that they could prosper in the post-downsizing company.
These efforts are only the touchstones to programs that companies could use to downsize more humanely and with less revenue loss. Whatever companies do, they must not forget the survivors--those who will be working harder after the changes. Together, employees, managers and senior executives must regroup and rebuild their ways of working together for a successful newly downsized company.
