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How to Restore Morale After Layoffs

January 27th, 2009 @ 9:11 am

22 Comments

Categories: Engagement, Management, Motivation, Productivity, Tips

Tags: Team, Layoff, Morale, Hayes Group International, John Shepler, Workforce Management, Human Resources, CC Holland

I got a call last night from a dear friend of mine. He sounded down, and with good reason: His company had just laid off 75 percent of its workforce.

My friend was spared the chopping block — although he now comprises 50 percent of the entire IT department — but was pretty glum after watching his colleagues departing. Despite a long conversation in which we explored all possible silver linings, he was clearly shell-shocked and discouraged about the situation.

Which got me thinking. I’ve written recently about how to cut back without layoffs, and how to conduct layoffs gracefully … but how do you restore morale and productivity after layoffs occur?

The Hayes Group International suggests a five-pronged approach to keeping survivors afloat:

  1. Plan: Figure out how the layoff will be communicated and how to assist survivors. Work out reassigned tasks and responsibilities ahead of time. Communicate why the changes were necessary and how roles will change.
  2. Communicate: Explain how the organization plans to recover, what role the employees will play, and why the changes had to happen.
  3. Listen empathetically: Most survivors will likely go through a period of grieving and guilt. A manager who’s able to console his team can help improve morale. When your employees air their feelings, listen more and talk less. Postpone responses and judgments until you’ve heard the person out. Use positive body language: make eye contact, nod as appropriate, and show you are listening and that you care.
  4. Maintain trust: Many survivors will feel at least disappointed; some will feel betrayed. To try to maintain trust, observe three important elements — demonstrate concern, act with integrity, and achieve results.
  5. Develop survivors’ skills: With reassigned responsibilities, some employees may need additional training. Anticipate this and have plans in place; talk with your team as time passes to see if they need more support.

John Shepler offers some additional tips for managers to cope with layoffs:

  • Understand the need for a mourning period among remaining employees. Help provide time and, if necessary, counseling.
  • Assess which employees are neither apathetic or hostile to the change. These positive employees will make the best leaders during the transition.
  • Try to exude optimism; minimize criticism; acknowledge and celebrate successes.
  • Build teamwork by creating a sense of “we’re all in this together and need each other to make it.”
  • Foster camaraderie and encourage group discussions and input. Encourage humor, even if it’s gallows humor.
  • Don’t overpromise; be honest. If you swear the layoffs are over and more occur, it’ll be almost impossible to regain trust.

Do you have any other suggestions for keeping your team’s morale up after layoffs? Share them with the Team Taskmaster community in the comments section.

CC Holland is an award-winning writer and editor whose work appears in several national publications and Web sites.

 
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  •  
    1

    NelleG

    01/27/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    Using the term survivor is psychologically appropriate because on some level some will have survivor's guilt, especially if they been with the compan a long time & didn't see the "axe" coming.
    Businesses can minimize some of the impact by trying their best to cut deep so they only have to cut once. It would definitely be wrong to make promises of no further cuts but in the long run it can help
    Also let people talk especially if the the cuts have been drastic. Give them a chance to voice their feelings. It is critical to be gebnuine & honest.

  •  
    2

    isabelmp

    01/27/09 | Reported as spam

    RE: How to Restore Morale After Layoffs

    Encourage employees to utilize the Employee Assistance Program. Organize short trainings on career development or resiliency for the remaining employees.

  •  
    3

    jaj6786

    01/27/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    Isn't this a lot like learning to stop worrying and love the bomb? Deep layoffs, especially of highly valuable and diligent employees, are a betrayal, plain and simple. "Surviving" colleagues are quite justified in feeling stung, frightened, and betrayed. I'm not sure trying to put lipstick on this pig makes moral or ethical sense.

  •  
    4

    jaj6786

    01/27/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    I should've added that deep layoffs can only make moral/ethical sense to employees if top brass and managers are feeling equivalent pain and making equivalent sacrifices: layoffs at that level, deep salary cuts, etc. Otherwise trying to boost morale of survivors will just feel like a rigged game of emotional dodgeball to them, or a disingenuous "perk up or else" gambit. Real honesty and fair play are the only things that make deep layoffs of good people even remotely palatable to "survivors."

  •  
    5

    washingtondar

    01/27/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    In a multi-tiered organization, sometimes there is a disconnect between what the most senior executive communicates about the reducation and what their leadership level executes. While organizing and executing a reduction in force is a stressful task, senior executives must find more effective ways to monitor the organization-wide execution to ensure their communicated commitments are consistent with what actually takes place.

  •  
    6

    NeutralityNow

    01/27/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    Forget about restoring morale. Just realize that what you see is not what they're feeling. The bitterness is only masked by the fear, and the knowledge that they'll all be working double or triple time to make up for the missing labor.

    You want good morale, get rid of them all and hire new staff, preferably young and unburned.

  •  
    7

    kujagra

    01/28/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    The basic foundation of any rebuilding or change management is integrity. if the employees know in factual terms what the top (and middle) management have been doing during the layoff period and how they have shortlisted the laid off employees and why the 'survivors' are still there (preferably because of their value to the Organization), then the task of restoring enthusiasm in the 'survivors' and channelizing them for way forward would be very easy.

  •  
    8

    Tim Noyce

    01/28/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    I have been on both sides of this. I think that candor, informing people of everything relevant as early as possible is both a good method of helping them cope and an ethical behaviour.

    Many of the points are just good management behaviour at any time. I would put in the caveat that "listening empathically" is not easy for all personality types. If you are not good at it, come clean and delegate those conversations rather than "smiling and nodding".

  •  
    9

    Jenny_Z

    01/28/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    from one side it is not easy to say good-bye to those who stayed with the company for years but on the the other side it could be a good time for motivating people inside company to do their best and have better results. so it is like two sides of one coin .

  •  
    10

    Jenny_Z

    01/28/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    I hate to say that but: Sometimes in the big IT companies there were more activities around the corporate culture, and staff retainment then about the work itself. it is just very painful but still really effective way to see who is actually working and bringing money .. and who is just wannabe.. it is important to share vision that if you stayed with the comapny - you worth it so be ready work on rise ...

  •  
    11

    Legal Cat

    01/28/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    Sometimes, you cannot. Particularly when management employees are not included in the layoff or are laid off and brought back a month later. People are not stupid. Often those left behind are never able to completely assume the extra workload and become apathetic or simply leave. Management must walk the talk, even if it means doing without a receptionist and letting their five or six secretaries share receptionist duties.

  •  
    12

    karolsapiro

    01/28/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    No such a thing as restoring morale. FUD prevails and the "survivors will keep a very low profile mixed with the famous "how low can you go" attitude.

  •  
    13

    Liviu-Mihail

    01/28/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    Recognize the top management mistakes, re-organize and redefine responsibilities and interfaces, motivate the "survires" to ensure they commit to additional tasks

  •  
    14

    patratu

    01/28/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    No layoff happens overnight - being transparent about the possibility and the reasons why is a good first step. Most employees can handle the truth much better than being surprised with a pink slip. Those who make the cut need time to 'heal', extra support from training or outside resources to manage the increased workload. Sympathetic managers are the key to keeping people on track.

  •  
    15

    Amy T

    01/28/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    Offering incentive programs to retain and motivate survivor employees while cutting costs is an excellent recession strategy. In order for an organization to create or sustain a competitive advantage in this economic climate, an incentive program can be designed to reward job-specific objectives, health and wellness achievements, perfect attendance, service milestones, innovation and teamwork. By targeting these areas, companies are able to increase performance in multiple areas for each level of employees thus maximizing employee motivation and potential.

    I have heard a lot of positive feedback from my new clients because their employees, many for the first time, feel reassured about their jobs because they are able to link company objectives to their overall compensation and benefits package via the incentive program.

    For more information, please read my blog on the topic at http://www.awardsnetwork.com/blog/2008/12/retaining-motivating-survivor.html.

  •  
    16

    DerekIrvine

    01/30/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    ?Layoff survivor syndrome? is a very real phenomonenon, with acute psychological recession effects among layoff survivors, including feelings of anxiety, depression, anger and physical illness. Just some research I?ve read recently on this topic:

    Vicki Goodwin, a professor at the University of North Texas? College of Business Administration, said in a recent Fort Worth Business Press article: ?Employees may even become ill from the stress and physical ailments that are related to stress. They are going to be more subject to injury, which people are when they are under a lot of stress, and all of that will potentially lead to absenteeism and can really impact the bottom line of an organization.?

    An MSNBC.com article confirms similar findings: ?A flurry of research after the economic downturn of the 1990s found that layoff survivors reported high levels of distrust and lower levels of motivation and engagement. Absenteeism went up, productivity went down.?

    Long term impacts are also great. BlessingWhite President and CEO Christopher Rice recently commented: ?Many of the leaders I've spoken to in the last few months express concern about engagement levels in their organizations. They're right to be worried. They need employees to stay focused and productive despite taking on the ghost work of laid-off colleagues, paused pet projects, eliminated perks, ever-shifting priorities, and the distraction of the latest headlines or hourly market fluctuations. In addition, soft economies jeopardize the natural balance that may exist in better times. The worst employees will stay as disgruntled hostages and top talent may leave because they still have mobility.?

    Facing absenteeism increases, productivity drops, and the loss of top talent to competitors, what can companies do during a recession with limited resources?

    Strategically using limited funds to institute employee recognition programs provide an ideal tool help you focus on increasing employee engagement in their daily tasks. Rice suggests asking yourself: "Where are your employees on the engagement spectrum? Do they know their three most important priorities out of all the items on their to-do list? Are they clear on how their work supports the organization's goals? Wherever possible, give them the information they need to succeed and the reassurance that what they do has meaning. ? Values and culture provide a stabilizing force during uncertain times and create an environment that inspires long-term success. Don't abandon them now."

    Strategic recognition programs directly feed these needs by showing employees who are recognized precisely what behavior or action of theirs was deserving of recognition and then linking that action to a company value demonstrated or organization goal achieved. This shows employees how their direct efforts impact company success ? has meaning to the company.

    Using the most positive method of reinforcement ? praise ? also helps establish the company culture as one of appreciation and not of fear, even during this tough economic environment. By continuing with or implementing a strategic recognition effort, leaders clearly show employees they appreciate their efforts and care about their well-being.

    Companies who institute strategic recognition simultaneously boost morale and productivity.

    More on this concept of recognition in a recession here: http://globoforce.blogspot.com/search/label/recognition%20in%20an%20ailing%20economy

  •  
    17

    koulet

    02/05/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    A year ago my old firm went through a round of layoffs. Just a week later, no fewer than six senior staffers had promotions announced. Talk about a punch in the gut! Many were understandably upset at the timing.

  •  
    18

    koulet

    02/05/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    Just 10 months later, I was axed in another round of layoffs.

    What's wrong with business leadership today? If a friend's company is any indication, much has been lost in the relationship between firm and individual. His firm set sales records in 2008 and enjoyed tremendous profitability, but because of the economic slowdown this firm laid off hundreds in anticipation of declines.

    Have we reached a point where contributing to negative feedback loops fails to enter the conversation? Is maintaining an operating margin of 20% more important than say 14%? This firm hasn't lost any money and wasn't forecasting it would before the layoffs.

  •  
    19

    bamcgraw

    02/08/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    Excellent and timely advice. One additional thought - your organization does not have to be the one who did the layoff. Organizations have project teams that have members who cross over organizational boundaries and other companies. A good PM (or manager) has to keep morale up in order to keep their project on track. It is an issue that many managers are dealing with right now.

    For further thoughts on dealing with morale and project management after layoffs, see the entry at http://fearnoproject.com/2009/02/05/keeping-your-project-on-track-while-the-sky-is-falling-economically-speaking/

    Bruce

  •  
    20

    mkathiravan

    02/14/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    Layoff itself is a -ve NOD for everyone. Cant
    help building trust overnight, it has to happen
    gradually, naturally among the remaining
    employees.

    For the business sake, the management has to
    keep things running as it was before (of course
    with less employees)

    Cheers,
    Kathiravan Manoharan
    http://kathyravan.blogspot.com
    http://paisamechanic.blogspot.com

  •  
    21

    emwambodze

    02/24/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    Can't forget the day my boss visited my branch office; where I was the manager, and announced to the survivors that there will be no more lays offs. The staff challennged him, and he made a bet, that if more lays offs were going to come, he would be the first one on that new list.

    Your guess is as good as mine. Same month following year, more lay offs, and he wasn't going no where.

    I agree, that it is very insensitive to make promises that are not based on any information.

    The manager should have prepared, and prepared the would be survivors too for the change of role profiles, and now focus them to fill in these new and expanded roles.

    But one thing that is mostly forgotten is proper hand over and file closures. I have seen many times survivors "crishing" under stress while trying to look for information all over the place; and watching deadlines slip away helplessly. This can be avoided if everyone was involved, and planned for the D-Day!

  •  
    22

    SiegeA

    02/25/09 | Report as spam

    RE: How to Restore Morale After Layoffs

    I survived a massive round of layoffs, including the horrible PM (salary of $75K) above me. Unfortunately, I'm expected to complete production on three different lines, and maintain all the duties of the former PM. The corner office still sits empty after 8 months, inventory counts have been spot-on with the VE system under my care, and I'm still making the same pay ($32K), with the same position title. sad
    Good to be a survivor. At least I'll have a lot of good stuff to go over during my annual review- should the company survive that long.

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