How Leaders Can Minimize Fallout from Layoffs

How Leaders Can Minimize Fallout from Layoffs
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The Fallout from Layoffs
It is estimated that 40% of Americans have been laid off or terminated from a job at least once.  In 2022 alone, there were over 15 million layoffs in the United States.  When the costs, skills, or role for employees no longer align with business realities or priorities, employee restructurings and layoffs can happen. What can leaders do to minimize fallout from layoffs?

How Leaders Can Minimize Fallout from Layoffs
Regardless of the driver, we know from our organizational culture assessment data that layoffs are never pleasant and can have a negative impact on employee engagement for those who remain.  What can you do to minimize fallout from layoffs?

  1. Start with Creating Leadership Alignment
    During a crisis, it is critical that leaders act cohesively and quickly with determination. After a layoff, every leader and high performer is under scrutiny by all remaining employees for their reactions and behaviors as clues to what happened and what the future holds.

    If leaders are misaligned, confused, skeptical, fearful, or more concerned with preserving their own status, employees will worry about their own role and consider leaving a sinking or wandering ship. However, if leaders are resolute, clear, consistent, and aligned in their actions, language and behaviors, the workforce will feel more confident in the path forward.

    Employees want to know that the process was as fair, transparent, and thoughtful as possible.  How you treat employees on the way out says a lot about your workplace culture.
  2. Be Authentic and Acknowledge the Human Toll
    Don’t forget that departing employees are friends of coworkers of those who remain.  Recognize that your employees who are leaving AND staying are suffering from a series of emotions ranging from depression and anger to fear of what’s coming next. These feelings can lead to serious employee disengagement unless you begin a conversation that is both empathetic and authentic.

    Be transparent about (1) the reasons the layoff was necessary, (2) the strategy going forward, (3) what you are doing to support current and previous employees, and (4) expectations on working together toward a successful future. These should all be two-way conversations held ideally one-on-one or at least in small groups where employees feel free to express their concerns and ask the questions that worry them.

    The goal is to replace employee fears with a renewed sense of purpose and belonging.
  3. Go Backward in Order to Secure the Future
    Change management consulting experts know that change is a good time to review the basics — your company’s mission, vision, and values. Whenever possible, make this a company-wide effort that actively includes everyone from the executives to frontline employees.

    Based upon the layoffs should you revisit and reframe where you are headed and how work gets done? With ownership of these strategy and culture fundamentals, your workforce will feel more engaged and committed.

The Bottom Line
Your actions in the wake of a layoff matter. Handled appropriately and with understanding, you can turn fear to renewed purpose, upset to understanding, and resistance to refreshed motivation.

To learn more about how leaders can minimize fallout from layoffs, download 3 Research-Backed Employee Retention Strategies

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