Addressing Employee Engagement Post Layoffs

Shockingly, the United States economy sailed past bleak employment forecasts last month, adding more than 500,000 jobs in January (take that, negative Nelly economists, who predicted just 187,000) and reducing the unemployment rate to a 53 year low of 3.4% according to the Bureau of Labor. But that’s not exactly encouraging to the many (many) folks who continues to hear layoff announcements on the daily. Realistically, there are a number of companies, even beyond the tech field, who are continuing to slash jobs.

What happens when companies engage in reductions of force? Well - it isn’t a pretty picture for the employees who squeak by with their jobs in place. Take a look at any social media to read the disgruntled, confused, sad, and downright angry responses from those who are let go and surviving employees alike.

Thing is, the bottom line gets hurt, too. According to Leadership IQ, 74% of employees retained after layoffs say their productivity declined afterword, and 87% confess they are less likely to recommend their organization as a great place to work.

There’s really no shortage of data to suggest that employees who avoid layoffs aren’t exactly grateful. Culture Amp found that employee engagement hit takes a pretty sharp hit post layoffs as outlined in their own telling data, with future and present commitment to the org reducing by more than 13%.

Source: Culture Amp

OK - that’s a lot of scary stats. What’s an organization who truly had to engage in a reduction in force supposed to do to address these disconcerting employee engagement trends? Try these tips - most are relatively easy to implement, but will go a long way toward your remaining employee happiness.

1) Keep “Cost Cutting” out of Your Narrative

Listen, your team members know that layoffs are about cutting costs and likely increasing your bottom line. But that reactive rationale does nothing for increasing employee investment and trust in the company long-term, and continues to leave them with that edge-of-your-seat feeling, “Am I next?”

Rather, discuss layoffs as part of a longer-term vision for the organization, one that benefits those left behind. Tying a RIF to a clear rationale that is proactive can go a long way here. “We needed to make these shifts in employees so that we can X in the future,” feels a lot better than, “We needed to cut costs.” The more transparent you can be about how the layoffs will impact the success of your organization (and those your employees) in the future, the better the news will land.

2) Narrate Leadership Fault and Sacrifices

Eating crow is no human’s favorite activity. But the bottom line is that leadership in your organization did, in fact, have a hand in the current state of affairs, and a straightforward, succinct acknowledgement of that can go a long way to increasing employee investment after a round of layoffs.

When Patrick Collison, CEO of Stripe, had to lay off 14% of his employees at the end of last year, his email to staff shouldered the appropriate blame and laid out how staff impacted would be cared for. Earlier this month, Zoom CEO and founder, Eric Young, announced that he would be taking a 98% pay cut following the reduction of 15% of his staff. While an extreme example, that is the kind of accountability that people need to see to feel confident in their leaders, and as if they are not in the painful part alone.

3) Get Crystal Clear on Employee Paths

Following layoffs, employees aren’t content to tread water. They worry about their career opportunities moving forward - are they stuck in this role? Are development opportunities done? An incredibly wise move at this moment is to engage an outside organization to support your team with job structuring and creation of role profiles. This step is a fantastic way to outline the work that folks do, and provide clarity on paths to promotion in the future, which increases investment in sticking around. (Side note: It’s also a must-do step for all organizations who are rightfully responding to the need for more robust, authentic, and lasting DEI efforts.)

4) Support Safe Conversation Spaces

Top-level silence breeds mid-level gossip and pretty soon you’ve got a poisoned tree based on hearsay and assumptions. After a round of layoffs, it’s vital for C-levels to provide spaces for the rest of the organization to share feedback and ask questions. Well-moderated town halls can work for this, as can department lunches attended by a C-level. However you do it, getting front-end input on the questions and concerns employees would like to address can help focus the conversation and allow the executive suite to prepare.

The point behind all of this is to continue the narrative of a compelling “why,” for painful decisions, discuss next steps forward, and to acknowledge employee emotions in times of uncertainty.

Struggling with employee culture?

Whether it’s due to a reduction in force, a change of leadership, or other big shifts, Agile Talent Consulting can support with your next steps. We’re dedicated and experienced in easing cultural transitions and improving employee engagement in their wake.