The workers who luckily avoided being laid off in 2022 and the first week of the new year face serious issues. Although their fate might be more favorable than those given the ax, the remaining employees won’t have it easy. They’ll confront a work environment much like Chinese water torture—the century-old practice of dripping water inconsistently on the forehead of the victim, slowly driving them mad as they don’t know when it will ever end.
Each morning, the remainers who escaped termination will worry if today is their last day at the company. Every task a person takes on is a potential landmine. If they make a mistake, lose a major customer, say something wrong in a meeting, miss a video call or fight to remain working remotely, there is an inherent risk of being targeted for the next round of layoffs. The combination of extra work, uncertainty and the sword of Damocles hanging over their head leads to a collective feeling of hopelessness about the future, causing the ones left behind to disengage.
The extra workload from the laid-off workers will be dumped upon the remainers. The increased responsibilities, without an accompanying raise in pay, will eventually erode their loyalty. Instead of putting in their best efforts, they’ll search for recruiters and new opportunities. The best and brightest are usually the first to leave, as they have more options, due to their skill sets and reputation. Recruiters will continually pick off the A and B-players who are left.
What Happens With The Workers Left Behind
As downsized workers and those who leave of their own volition walk out of the building or permanently log off of the firm’s Zoom and Slack channels, the remaining employees will assume the worst. No one wants to be the last person to get off the Titanic.
If a manager does not plan to backfill the role of a departing team member or consider bringing temporary help and contractors aboard, the remainers will think that the company has significantly greater financial difficulties than they are sharing with the public. The longer the remaining workers are forced to pick up the additional projects and made to put in longer hours, the more they’ll become angry, resentful and frustrated.
If a “work spouse” or close, friendly co-workers leave, the ones left behind feel a sense of loss. One of the biggest reasons people remain at a company is because of their tight relationships with a small group of work friends. When one or more leave this close-knit team, the others will consider switching jobs.
Soon, the best and brightest will be gone. The company is then left with C-level players that no one else wants. The quality of work deteriorates. Customers and clients are not attended to, as employees are stretched thin and losing their patience. They take their business elsewhere, negatively impacting the company and creating a downward spiral.
Companies Made A Mistake By Misjudging The Market And Hiring Too Many People
Whether you love or hate him, Elon Musk exposed a dirty, little secret about the workforce. Musk, coming across as brash and insensitive, iterated in real time on Twitter about how many people it really takes to run the social media network.
Behind closed doors, CEOs and executives of companies agreed to enact large-scale layoffs and conveniently lay public blame on the Federal Reserve Bank and the economy. They point to record-setting inflation. The Fed’s efforts to whip inflation, including hiking interest rates, further hurt companies as the cost of borrowing money rises. Following Musk’s lead, a contagion occurs as other companies feel free to execute their own job cuts.
Layoff announcements are becoming business as usual. A major company announces that it’s downsizing and then the CEO offers a mea culpa, stating, “This is the hardest thing I’ve ever had to do. We hired too aggressively and need to make cost cuts to get in line with the new economic environment.” Of course, the C-suite is largely immune from the downsizings and their bonuses, stock options or salaries are not cut due to their ill-advised business decisions. They’ll still earn small fortunes. Meanwhile, the average workers are the hard-working people who were given pink slips and unceremoniously shown the virtual door via email.
What Leadership Must Do Now
Smart leaders should promptly address why the layoffs were necessary and share what to expect next. Most leaders don’t realize that the top talent is the first to seek new opportunities elsewhere. Reach out to the workforce and ask how they feel and what needs to be changed, in light of the new circumstances. Based on feedback and constructive criticism, management should start implementing measures tailored toward retaining and enhancing the work lives of those who remain at the organization.
Moving Forward, What CEOs Should Do In The Future Instead Of Laying Off People
Rather than following the herd, confident business leaders can break from the pack and choose options other than layoffs. Management can offer temporary furloughs with an opportunity to return when circumstances improve.
Companies can convert employees into temporary or contract workers for the short term until the economy rebounds. Shortened work days, truncated workweeks, sabbaticals and flexible scheduled hours can keep people working, albeit at fewer hours and a slight decrease in compensation. However, at the very least, the people will still have some money coming in. A company can enact hiring freezes and allow attrition without replacement until its financial situation improves.
The CFO can look at the budget and cut the fat. For instance, before Meta employees were downsized, the social media giant could have cut over-the-top amenities, such as ever-increasing stock grants to senior management. The company could have done away with free laundry services, transportation, unlimited food and other lush perks. These and further incremental cuts could have been put on hold to save at least a few jobs.
Human Resources can use artificial intelligence to discover people’s skills, talents and abilities that can be repurposed for other organizational roles. An investment in the future can be made by training people to learn new skills. Workers with 20-plus years of experience may be offered buyouts for early retirement. Pricey real estate can be sold off, or companies could let their leases expire and pivot to a remote-first policy. This would save people from being cast out in the cold.
Laying off people is a short-term solution that can backfire. The United States economy is like a pendulum that swings back and forth between two extremes. While it may be tempting to enact massive layoffs when things look bleak, it could only take three to six-plus months for the economy to turn around.
Similar to what happened during the pandemic, once the U.S. headed out of the danger zone, businesses could not find enough workers to meet their demands. This could happen again. The company could lay off the superb talent that its competitors could later pick up. Then, the business has to hustle to find, recruit, onboard, train and retain new employees. The odds are high that the new people will require higher compensation to offset high inflation. It would have been less costly to simply hang tight and hunker through the difficult times without letting folks go.
By keeping employees when things go wrong, the company earns a reputation for being empathetic, loyal and employee-friendly. People will remember the bold decision to hold firm and keep everyone employed. Conversely, if workers are summarily dispatched without compassion, they’ll be seen as cold-hearted and untrustworthy.
Source: Forbes
