After the Layoff: Managing the Survivors

By Bruce L. Katcher, Ph.D.

It was 8:30 a.m. in the offices of a large Midwestern telecommunications company.  The normally crowded, bustling hallways were empty.  There was an ominous feeling in the air throughout the building.  Employees were nervously burrowed in their cubicles.  Many of them had already packed up their things the day before, just in case. There was going to be a “surprise” layoff that day, and everyone knew it.  Word had passed like lightning through the rumor mill several days earlier.  It had even been leaked to the media and had been announced that morning on the local television station.

One by one, throughout the day, employees were called and told to report to a conference room on the first floor.  When the phone rang, the caller ID told them that the end had come.

Their manager and a representative from the human resources department were waiting in the room for them.  The manager, his voice quavering, barely making eye contact with the employee, read from a script that said that today was the employee’s last day on the job.  Even though many had expected this bad news, they were stunned.  Then the human resource manager related details about severance and had them sign a few papers.  They were then escorted out the door by security, never to return.

The next day there was a little more activity in the hallways, but things were just not the same. The organization was still in shock and mourning.  Many employees were relieved that they had survived to see another day and another paycheck, but most worried that there might be more layoffs to come.

People tried to focus on their work, but their efforts were waylaid by worry, anxiety, and stress.  There were very few productive meetings and little informal conversation.  Most people had a difficult time downing their lunch, kept their eyes on the clock hoping that it would move more quickly, and then left promptly at 5:00.  The stress lasted for many weeks and things never did return to normal.

The Problem
Sadly, the above scenario is all too common in many organizations today.  After a big layoff, the morale and motivation of the survivors can be a major problem for employers.

These are very trying times in the workplace.  Senior management is faced with the task of trying to motivate stressed out, anxious employees who may feel sad about their colleagues who are gone and guilty because they still have jobs. 

Layoff survivors are worried about:

• Losing their own jobs
• Making less money, with the possible loss of pay raises, incentive payments, and/or bonuses
• The security of the jobs of their spouses and children
• How they will survive retirement in the face of declining value of their homes and investment portfolios.

What to Do
Many senior executives empathize with the stress their employees are experiencing, but feel powerless to do anything about it.  Here are a few things they can do.

1. Remind employees about the company’s Employee Assistance Program (EAP).  These programs can help people deal with personal, emotional, and financial problems.
2. Conduct in-house workshops.  Hire speakers to present workshops on are topics that are particularly important to employees today, that is, reducing stress and managing finances.
3. Instill optimism and hope.  Now, more than ever, employees want be hopeful.  They want to know the truth about how their organization is faring and what it is doing to meet its current challenges.  Senior management must remain upbeat and visible to employees.  Instead of hiding in their offices, they need to spend more time telling employees about how the organization is going to survive and even thrive.  They must pump up the energy of employees with practical strategies that instill hope.
4. Celebrate successes.  Employees hunger for good news.  Share positive information such as new prospects, new customers, sales from existing customers, successful launches of new products, additional company funding, favorable letters from customers, or favorable reviews about products.
5. Show employees you value them and are investing in their personal future.  Employees want to know that even during difficult times their organization views them as important assets.  When business is slow, it can be an ideal time to train people on new skills and retool them to better face upcoming challenges.
6. Revisit your compensation program for some employees.  Many employees are paid contingent on what they produce, their billable hours, or what they sell.  The strategy works very well when business is good, but when workflow is reduced or customers are just not buying, these employees make less money.  To keep them in the fold, you may need to alter how they are paid.   For example:
   
   —For production employees paid by the number of pieces they produce, consider paying a fixed living wage until business picks up.
   
   —For the sales force, consider temporarily increasing the base pay percentage or increasing the draw they can take.  My colleague, John Haas, an expert on incentive compensation ([email protected]), suggests providing incentives to the sales force for desired behaviors that will eventually lead to sales when business picks up such as meetings with A customers and telephone calls to B and C customers.
7. Beef up employee recognition initiatives.  During stressful times especially, employees want to know that their employer recognizes and values their hard work.  Supervisors should make a point of providing employees with verbal recognition.  A pat on the back and words like, "keep up the good work," "you're doing a great job," and "thanks for your hard work" can go a long way to improve employee morale and relieve stress.
8. Promote work/life balance.  Remind employees that during stressful economic times it is important for them to be supportive of their families.  Urge them to use their vacation time and spend time with their families.  Also, encourage them to try to plan to do something fun every day.
9. Conduct fun activities in the workplace.  When appropriate, try some low-cost, fun activities to lighten up the atmosphere: a potluck lunch, dress down day, Halloween in June, noontime talent show, karaoke after hours, or a checkers tournament.

Conclusion
It is easy to manage an organization when business is going well.  The true test of management is how well it can keep employees motivated and engaged during difficult times, especially after layoffs.  Implementing some of the initiatives outlined here will go a long way to creating a more productive workplace.

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