We've already written about two different aspects of layoffs: how to answer employee questions about them, and how to conduct them in a humane way. Now we’re looking at the next phase:
How can you improve morale and maintain performance after you’ve had a reduction in force?
- Calibrate your expectations.
Declines in worker productivity following layoffs are well documented, so accept that your efforts are more about damage control than damage prevention. “[A layoff] is almost certainly going to cost you a little or a lot in the short term,” says Batia Wiesenfeld, a professor of management at NYU Stern. “The question is how quickly do people bounce back—so, you can make the dip shallow and you can make it short.”
2. Repeat yourself.
Any messaging from your leadership team around the layoff decision-making process should continue even after it’s done. Layoff survivors will be more committed to their company if they perceive the layoff as fair, says Wiesenfeld. She explains that that perception of “fairness” has four components:
- Distributive justice: Were laid off employees taken care of? (Were they given a generous severance and a long runway for health insurance?)
- Procedural justice: How were decisions about layoffs made? (Is there any evidence of bias in who was laid off? Were layoff decisions based on accurate information?)
- Interactional justice: Were laid-off employees treated with dignity and respect? (How were the layoffs carried out?)
- Informational justice: Is there an explanation of why you’re doing what you’re doing? (Why were layoffs necessary?)
Send a follow-up message to your remaining employees that emphasizes points two and four: Your employees should know why layoffs were necessary and why certain teams or departments were impacted.
Getting this step right is critical, because “once you've broken that trust and that feeling of psychological safety, it is really hard to build it back,” says Chris Zatzick, a professor of management and organization studies at Simon Fraser University.
3. Lay out leadership's vision going forward.
Communication after a layoff should broadly address two things: compassion for the employees let go, and the opportunities available to the employees who stay. Work with your CEO to develop a message for the whole company that conveys both of those points, similar to the note Amazon CEO Andy Jassy recently shared with employees about layoffs.
Jassy’s note first expressed compassion:
“It’s not lost on me or any of the leaders who make these decisions that these aren’t just roles we’re eliminating, but rather, people with emotions, ambitions, and responsibilities whose lives will be impacted.”
Then it focused on Jassy’s vision for the company’s future:
“We have big opportunities ahead, both in our more established businesses like Stores, Advertising, and AWS, but also in our newer initiatives that we’ve been working on for a number of years and have conviction in pursuing (e.g. Prime Video, Alexa, Kuiper, Zoox, and Healthcare). The key will be to do what Amazon does best—obsess over customers and invent relentlessly on their behalf—and if we do that, we should all be very optimistic about Amazon’s future. I know I am.”
4. Invest in one-on-one time.
Some level of attrition is natural after a layoff. One 2008 study in the Academy of Management Journal found that, on average, letting go of just 1% of the workforce predicts a 31% increase in voluntary turnover. The goal is to minimize this attrition as much as possible, especially among your top performers.
Zatzick recommends asking managers to schedule one-on-ones with their reports to address any concerns, identify opportunities for growth, and highlight the chance to develop new skills within the organization.
It’s important to “make sure they know they are safe and well cared for,” agrees Anita Grantham, the head of human resources at BambooHR. “Make sure all of their questions are answered and they have clarity on how to be successful.” To reinforce that messaging, Grantham recommends having the CEO hold similar conversations with employees you’re especially concerned about losing.
“Being able to give people a sense that you can be part of rebuilding the next phase of the organization's life, and then it will help develop you is…something that can retain some of your best performers,” says Wiesenfeld.
5. Address the workload.
Expecting the same amount of work from fewer employees is a recipe for burnout. Layoffs are a great time for an attention audit, something Culture Amp CEO Didier Elzinga highlighted at the Charter Workplace Summit earlier this year. “We can actually sit down and look at it and give ourselves almost a budget,” he said. “How are we going to prioritize the things we need [a company’s staff] to focus on?”
Work with the leadership team to draft a company-wide email that acknowledges that employees might be feeling overwhelmed and shows that you’re focused on creating a sustainable workload. Encourage managers to help their staff deprioritize certain tasks by creating “No-KRs,” a term used by Colette Stallbaumer, general manager of Microsoft 365 and Future of Work at Microsoft, that refers to tasks employees can take off their plate.
6. Make sure managers feel heard.
Managers are pivotal players in the post-layoff environment, and leadership should solicit their input, says executive coach Merideth Mehlberg. Broadly, the message should be: “Let's have you share with us what you think is important that needs to be incorporated into our [plan going forward],” she says.
Schedule group sessions that managers can opt into to talk about the higher-level challenges their departments or teams face. Mehlberg suggests having an outside party facilitate these sessions so the participants feel like they can openly speak their mind with “someone who doesn’t have skin in the game.”
After the sessions are complete, Mehlberg suggests meeting with the c-suite to select a handful of areas the company is going to take action on, such as creating a program that allows managers to reward top performers to prevent turnover. A summarized version of these themes should then be shared with managers to show that the company leadership has listened to their concerns and they are taking steps to address them.
Key Takeaways:
Make it clear to your remaining employees why layoffs were necessary and that the company took care of exiting employees.
Encourage managers to schedule one-on-ones with the remaining employees to address their concerns and adjust their workloads.
Schedule group sessions with managers to talk about the higher-level challenges their departments or teams face and select a handful of areas the company is going to take action on.
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