In recent years, companies have done a much better job of handling layoffs, providing outplacement and other support services for departing employees. But they still have not mastered the art of communicating the reason for downsizing to employees, if a new survey by Andersen is to be believed. The study found that survivors are more likely to disapprove of management’s decisions regarding layoffs than those who lose their jobs.
Only 37 percent of retained employees considered management handling of recent layoffs in a positive light, according to the survey, while nearly half (46 percent) of workers who were laid off said their respective companies did a good job executing staff reductions.
The major factor in the dissatisfaction of corporate survivors was the way companies communicated with them during the layoff process. Half of all survivors learned about layoffs at their companies by rumors or word-of-mouth, while 10 percent found out through the media or other external channels. Only 43 percent were notified of impending layoffs through official company communication such as direct contact with management or an internal memo.
“Layoffs have a profound impact on a company regardless of how they are handled, but it is extremely dangerous to alienate the employees you want to retain as a result of poor communication,” says Michael Lyman, Andersen’s U.S. managing partner for its change practice. “Companies are remiss if they don’t keep the needs of employees at the forefront during such a disruptive cultural change.”
Lapses in the companies’ ability to communicate with surviving employees significantly damaged morale. Almost half (46 percent) of respondents reported lower morale in the last six months. Additionally, just 34 percent of remaining employees felt management appreciated their value to the company, only 37 percent rated management’s honesty in regards to layoffs as good or excellent, and less than half (42 percent) felt that support for remaining staff was adequate.
The survey also found that culture change is the greatest fear surrounding possible restructuring When anticipating restructuring at their company, 21 percent of respondents said they feared cultural change within their workplace above all else, including losing their job. An additional reduction in staff was the chief concern of 19 percent, while 18 percent cited leadership changes.