India has seen a spate of layoffs recently due to various factors--digitalisation, automation, mergers and acquisitions and/or poor company results. Layoffs aren’t like ripping off a Band-Aid, it isn't 'business-as-usual' once the sudden pain passes. The actual effects are far-reaching. Many businesses think that proactive PR efforts can help them emerge unscathed from layoffs, when actually what they need is to focus on the people involved in the equation--affected and continuing employees--to mitigate damage. Let’s take a look at the impact of layoffs and targeted engagement strategies to tackle its ill-effects.
How to support laid-off employees
Laid-off employees are the most affected and how organisations facilitate the exit plays a crucial role in how they respond. If you recall, the Bochum Nokia incident is an example of how wrong things can go if not handled properly. There, a week after the layoff news was conveyed to employees, thousands of protestors gathered and angrily crushed the brand’s phones, while unions advocated boycotting Nokia’s products. The response delivered a big blow to its market share in Germany, leading to a sales loss of nearly €700 million during 2008-2011.
Fast-forward to 2011, the telecom giant faced another retrenching requirement. Only this time, it was better prepared and deployed a targeted exit plan so that employees felt that the exit process was just and unbiased, and it was received in a better way. So how do you manage laid-off employees fair and square?
- Be transparent about reasons for layoffs: Large organisations use corporate parlance such as limited restructuring, reclassification and right-sizing to disguise layoffs and cushion the blow. Spokespersons offer reassuring statements to the general public, so that the brand image and investor sentiment isn’t hurt, while laid-off employees are asked to leave with little explanation or consideration. What follows is a trail of scorned ex-employees. To avoid this, handle the situation with dignity, authenticity and transparency. Don’t mince your words or trivialise it. Treat affected employees with respect, acknowledge their feelings, let them know it’s not personal and provide them answers.
- Offer equitable exit packages: Ease the immediate financial stress that laid-off employees face. Fair exit severance packages are indispensable. Don’t make affected employees tail you to receive their dues; make exit processes prompt and smooth.
- Immediate career assistance to laid off employees: The immediate need for former employees will be finding a new job; support them so they can move forward. Reposition them in prevalent roles or repackage roles to match their skillset. Offer training so they can upskill and re-join. If those aren’t options, give them a notice of at least 30 days before termination. Partner with outplacement or career counselling agencies so they can find new opportunities.
How to motivate your continuing employees
A culture of fear and uncertainty experienced during layoffs doesn’t do good to employee morale, motivation or productivity.
A research study by BI WORLDWIDE, depicted graphically here, shows how employee happiness, commitment and performance scored among 402 respondents who survived layoffs in workplaces vs. 636 employed in workplaces without layoffs. There is a noticeable drop in employees’ sentiment and performance in workplaces with layoffs even though they survived the crisis; if not mitigated it can do serious damage. So how do you tackle it?
- Make them fearless: BI WORLDWIDE’s 12 New Rules of Employee Engagement research study says organisations need to “Make employees fearless”. Talk to employees and make them courageous and passionate about opportunities, than sharing messages of consolation and self-preservation during layoffs.
- Eyes on the goals: Goals often get side-lined during layoffs, as decision-makers are preoccupied with facilitating changes and rumours make rounds during lunch-table and watercooler conversations. Lay emphasis on productivity goals and deadlines, so employees do not get distracted and are always locked in on KPIs.
- Communicate openly: Convey news - good and bad - to employees. Don’t leave them guessing about what’s happening. Managers can counsel teams to set the right tone and tackle negative talk. A global research by BI WORLDWIDE shows that 2 out 10 employees feel that their managers don’t talk to them regularly. Make sure their immediate managers are available to listen to employees’ fears and concerns, so they don’t have to go elsewhere to voice their worries.
- Make a strong proposition: While the strategies mentioned above may help mitigate ill-effects of layoffs, you need something more substantial to keep existing employees going. A strong bond between employees and the employer, nurtured from day one, helps get through ups and downs together. To foster a strong bond, meet your employees halfway, offer them what they want vs what they need, give them a strong reason to stay and perform well - whether layoffs or not. No we’re not talking about performance bonuses or fancy team lunches; we’re talking about Employee Value Proposition (EVP), a unique proposition that an organisation creates for its employees encompassing work, opportunities, culture and benefits that they deeply care about. It’s the sum total of all experiences, emotions and interactions that offer them the physical, mental and emotional capacity to do their best at work. While layoffs may destabilise employee morale and motivation, a strong EVP can help reinstate it and shield your organisational culture.
Employee engagement is usually not the foremost priority for organisations during layoffs. To avoid an adverse impact, make it a priority and manage employee sentiment, opinion and morale and help navigate the organisation through these crucial times.
The author is CEO & MD of BI Worldwide India.