When companies face challenging economic times, layoffs are often chosen as a viable way to reduce costs. In the short term, this makes the company’s balance sheet more appealing to shareholders and the company is more financially stable until the economy picks up again. In the long term, this workforce reduction can sometimes realign resources to increase productivity on the most important projects and jettison those projects that are unprofitable. Layoffs may therefore help a company become more efficient regardless of the economic climate.
However, layoffs can also create a great deal of stress among employees who remain on the job as they feel the loss of their coworkers and may be concerned that they are next. This sense of loss should not be minimized and should be acknowledged by upper management to demonstrate their own compassion for those who have lost their jobs. And a little bit of stress by those left behind is not necessarily a bad thing, of course, but if the stress keeps employees from doing their best work, it can be detrimental to the organization. In addition, those employees still on the job may have had their workload realigned and/or increased due to the reduced workforce, which further increases this stress.
In a typical workplace environment during the best of times, only 29 percent of employees are actively engaged in their jobs, while 71 percent are disengaged—either not engaged at all (54 percent) or actively disengaged (17 percent)—according to the most recent Gallup Management Journal’s Employee Engagement Index. In tough economic times when layoffs are present, this employee engagement is likely to be even lower.
Employee engagement activities can help reduce stress by demonstrating the organization’s commitment to the employees who remain on the job. It can also help employees feel more committed to the organization. A leader’s ability to articulate a shared purpose that complements the overall mission is critical for success going forward. And the most effective of these employee engagement activities result in management demonstrating clarity, connection, and collaboration.
When leaders clearly communicate a compelling vision for employees to embrace, people feel engaged in their work because they know where they are going. Employees are ready to follow a leader who knows where he or she stands and clearly communicates this. When employees know what the organization stands for, where it is going, what it wants to achieve and how they can directly contribute, employees are motivated to do their best work. This clarity among leaders is not always apparent and, during times of layoffs, needs to be especially so in order to reduce employee stress.
Leaders also need to connect with employees to show that they truly value them. This can be demonstrated in many formal ways, including profit-sharing, flex-time, and clear advancement opportunities with follow-through. But this connection should also include actions that are not directly related to the job and as simple as engaging employees in a conversation unrelated to their work. Simply getting to know and appreciating your employees as fellow human beings working to pay the bills, raise a family, and pursue a happy and productive life goes a long way in building trust. Also, what leads to true satisfaction for most employees is the credit they receive for the job they perform. When a leader credibly states that his or her employees are the organization’s greatest asset, this helps him or her connect. Exceptional leaders extend a great deal of recognition to others and they do this a lot. Ultimately, being cared about by colleagues is a strong indicator of employee engagement within an organization.
All good working relationships include trust and cooperation, which is a requirement for strong collaboration. Leaders can inadvertently discourage this collaboration with an overly competitive workplace where no one wants to share information for fear they will lose power or resources as a result. However, when leaders freely share information and encourage others to do the same, they can foster a collaborative environment that enhances employee engagement.
Most of these employee engagement activities do not require additional spending, however, some leadership coaching may be necessary to help further develop the ability to cultivate clarity, connection, and collaboration. Those leaders who use employee engagement activities such as these will go along way in reducing stress caused by layoffs and bring about lasting commitment among the employees who remain.