Layoffs, Leadership and Emotions: The Trifecta of Discomfort

Being the social scientist that I am, I was drawn to do some research on the human side of layoffs. I found a statement which said, “…dismissing 1% of your work force evokes a 31% increase in turnover.” I just threw that out on social media. It was from a credible source, so I just threw it out there. Several people asked questions (Ellen and Kelly), prompting me to dig further. Here is some context from the article and some additional change management thought process.

The article, by Wendy Mack and Deanna Banks, spoke to leaders about managing the process of ensuring that the work force is appropriated properly on their bottom line. These leaders must make very unpopular decisions. They most likely don’t feel good about the selection process, or about facing those people, in the process of turning them out onto the streets. But nobody thinks about them, do they? Well, not managing the human side of being a leader carries a hidden cost. As the process of laying off employees starts, discussions held behind closed doors become secretive. That is where the article says things go terribly wrong. The secretive nature of the meetings may or may not be public knowledge, but it can cause the energy or vibe in the office to change, and people react to that inherently. Leaders don’t want to alarm people so they say nothing – or worse, they may not be truthful. Employees find this unsettling. They feel unappreciated and certainly not part of the team. Unfortunately when the truth come s forward the trust is broken.  This is a lot of energy directed in places other than work.

Layoffs are often executed with very little processing time. One minute, someone is called into an office and the next minute, they’re escorted out of the building. The co-workers with whom they have relationships they’ve cultivated daily, possibly for years and sometimes for longer than their marriages, are left standing, wondering what happened. They are also wondering what’s next for them. This is not an environment of safety. It’s one that evokes the basic reaction of fight or flight, which Walter Canon described as a very human response to fear.

Now in the work place, it’s not politically appropriate to fight. Nor is the timing any better when you’re in danger of losing your job. ‘Just deal with it quietly,’ that’s the implicit message when a leader swoops in, fires someone, then goes back into their own office and closes the door. The remaining employees are left grieving the loss on many levels; for those relationships, the illusion of security, the understanding of their job duties, the environment of safety, and their value to the organization and team. They are asked to manage their emotions without showing them, plus get additional work done. Naturally, internal productivity goes down and so does customer service.

In addition to worrying about those who’ve been discarded, remaining employees may also believe they are next. The only sure way to check their value is by leaving.  People react with fear. Leaders who are especially adept at human interaction will save many of those relationships and, just as importantly, all the tacit knowledge and skills that are in those employees. These are leaders who minimize the “survivor’s sickness” of which Wendy and Deanna speak in their article. They also minimize turnover.

The quick version of their recommendations for how to ease the people side of layoffs all stems around grieving and continuing to communicate through the process. The hot new idea (it’s about time!) is ‘transparency’. That’s just clear communication and allowing people to know what’s going on so they can contribute.

• Senior leaders must be more available and visible.
• Communicate openly internally, as if the employees are part of the team. Don’t just parrot the crafted verbiage which investors want to hear.
• Allow time to process: both the trusted employee being laid off and the remaining employees are left to pick up the pieces of their loss.
• Know that your employees are watching how you treat those who are leaving.
• Appreciate the additional workload for those employees remaining.
• Again, realize that your employees have relationships with those who’ve been impacted.

Now what? As a leader you’re wondering, what should you do? Build in support for those in the positions to execute the layoffs. Expect a period of time that will really show the impact of the changes that have been made. As a leader, you have the same emotions, but you have additional responsibilities to the company and to the employees. Open your door and listen. You will hear the ‘state of the state’ and be able to minimize negative impacts. People need to be heard. The article describes emotions that are likely to appear: Shock, anger, fear, anxiety, hopelessness and sadness. These aren’t stages that all people go through, but some will feel them. Listen for signs that people are getting stuck in these emotions.

Sheila Simon, a Minneapolis Spiritual Grief and Business Consultant, suggests a simple set of questions from Dr. John Schneider to help people move through their grief. This is not easy, but it is simple. Ask, “What is lost?” Then ask, “What is left?” And when you’ve moved through those questions and the group is ready, ask, “What is possible?” When you get to what is possible, the sparks will really fly, bringing in new life and new ideas. If you’re uncomfortable holding those conversations, hire a trained facilitator or coach to hold conversations and get the emotion out of the corners and into the room, where you can honor and face it.

Communication through change is essential for smooth transitions. Managing people can be messy, and so is change. But ‘business as usual’ isn’t going to work anymore.

Resources:
Mack, W. & Banks, Ph.D., D (2009) Leading after Layoffs: Best Practices for Re-Energizing Your Workforce, wendymack.com , retrieved 10/21/09 from http://wendymack.com/resource-center/layoffs-anxiety-energy-ebooks-wendy-mack.html.
Bridges, W. (1988). Transitions: Making sense of life’s changes. Reading, MA: Addison-Wesley Publishing Company.
Bridges, W. (1991). Managing Transitions: Making the most of change.  Reading, MA: Addison-Wesley Publishing Company.
Schneider, Ph.D., J. (1989, 11/03/09). The Transformative Power of Grief. Noetic.org Retieved 11/03/09, from .http://www.noetic.org/publications/review/issue12/r12_Schneider.html.