“But at least you still have a job.”
Yes, those who survive the all-too frequent layoffs these days are grateful for their work, but studies show the stress from all the upheaval can wreak havoc on their health, morale and productivity. And don’t expect them to work harder out of sheer gratitude, a recent survey suggests.
Deborah Dunn, a stress-management counselor who worked with survivors of the shootings at Virginia Tech and Hurricane Katrina, says dealing with the recession and ongoing fears of being laid off can be as difficult as dealing with a disaster. “It’s a killer,” she says.
These people have lost good friends, vast quantities of institutional knowledge, pay raises, benefits – plus, they’re being asked to add other people’s work to their own load. And they’re expected to be upbeat about it.
“There’s that low-level anxiety, vulnerability to colds and flu, aches and pains, sleeping difficulties. When you’re anxious, waiting for that next shoe to drop, your body stays in a kind of fight-or-flight mode,” Dunn said. “…your body is overproducing adrenaline, cortisol, the hormones you need to sustain yourself during a crisis. .. Those substances your body is producing are very toxic.”
There can be guilt that they were spared, anger and depression. (I wrote in December about the risk of insider threat.)
Leon Grunberg, a professor at the University of Puget Sound, summed up this way what happens to layoff survivors:
“There’s a huge increase in insecurity and that uncertainty is very destabilizing.”
As part of a 10-year study of downsizing at a major U.S. manufacturer, he looked at depression in workers in surveys two years apart in the ‘90s.
He was amazed to find that depression scores dropped by more than half in those who took a voluntary buyout. (He tells that as a “there is light at the end of the tunnel”-type story.) There was little change in those who left involuntarily, but, interestingly, depression scores rose slightly among the workers who stayed on.
From the company’s data on sick leave, he also found that managers and other higher-skilled workers took more sick leave, he suspects to look for other jobs. Less-skilled workers, meanwhile, took less sick leave and absenteeism at the company declined as workers hunkered down, trying to hang on to their jobs. And that was in a job market much more favorable than that of today, he points out.
This BNET piece points to research that layoffs often don’t improve companies’ financial performance – essentially the reason they are done in the first place – and to a 2003 study by the Institute of Behavioral Science that found that people who had seen co-workers laid off reported poorer mental and physical health than workers who had not been exposed to layoffs at all. Reporting even worse health and attitudes were layoff survivors who were shifted to different positions or departments within the company.
One of the inherent dangers for companies is that handling layoffs badly can taint the perceptions of those who are left. They’re the ones the company is relying on to move the company forward, yet as the Wharton School’s Michael Useem notes, that “depends on the respect that remains for those who have led the downsizing.”
Grunberg says a lot was going on with the company he studied, including a merger, an increase in outsourcing and a move away from its “we’re a family” culture to more of a shareholder-driven company. Workers took that as a betrayal, he said, with comments that they were being treated as a number or an expendable commodity.
Layoffs are especially difficult for companies that have fostered that “family” culture, Dunn says.
“That whole metaphor breaks down,” she says. “I hate that – ‘We’re a family. We take care of each other.’ Well, damn, you don’t divorce your children.”
It’s hard enough for workers to concentrate when rumors are swirling at the water cooler and online – and they can quickly turn toxic in the absence of reliable information from the company – but to see coworkers escorted from the building like criminals only hurts morale, Dunn said.
Though plenty of articles simply say productivity goes down for layoff survivors then move on to the next point, Grunberg says it’s not that simple. He says it depends on how productivity is measured and the economic climate in which it occurs. For instance, any form of restructuring takes some getting used to.
This white paper from consultants The Hayes Group says workers need time to grieve a layoff, just as they would a death in the family. And workers who have to take up the slack might require more training, which suggests there will be a period of inefficiency until everyone is up to speed on the new tasks.
But a study released in December by training and research company Leadership IQ bears a sting, nevertheless. It’s based on surveys of 4,172 workers who survived corporate layoffs. In the study:
• 75 percent said their productivity has decreased.
• 64 percent said it’s true of coworkers.
• 69 percent said the quality of the company’s products or services has declined.
• 81 percent said customer service has been hurt.
• And 61 percent believed the layoffs have hurt their company’s future prospects.
The bright spot in the survey, however, echoed the advice of many experts: You can lessen the blow by being as open and forthright with employees as possible. Workers who rated their managers as visible, approachable and candid – even when there was nothing new to report — were much less likely to report these declines.
“You really can’t over-communicate right now,” says Jason Zickerman, CEO and president of business coaching service The Alternative Board.
“Let [surviving workers] know that they’re here because you believe they can work together to get the company through these very challenging times. You’ve got to show them your appreciation. Help them prioritize their work. Let them know why they are there and let them know how they can help. …” he says.
“This is not a time when you can sit in your executive office and not deal with your people. You have to be out there, letting them know what’s going on and have them feel that you’re in a fight for them.”
