Layoffs Pack Punch to 'Surviving' Employees

By Kathy Gurchiek Dec 22, 2008

Don’t expect employees who survived their organization’s layoff to work harder out of a sense of gratitude, report the authors of a new study. Three-fourths of 4,172 workers who have kept their jobs say their own productivity has dropped since their organizations let people go.

The findings are based on a Leadership IQ survey of workers who remain employed at 318 companies following corporate layoffs conducted since June 2008.

Employees answered questions about productivity, product quality, workforce issues and management effectiveness.

What it found wasn’t pretty:

  • 87 percent are less likely to recommend their organizations as a good place to work.
  • 81 percent say customer service has declined.
  • 77 percent see more errors and mistakes being made.
  • 64 percent say their colleagues’ productivity has declined.
  • 61 percent think their organizations’ prospects have worsened.

The reason for this downward spiral is “layoff survivor stress,” says Mark Murphy, chairman of Leadership IQ.

“There is a great myth that, following a layoff, the surviving employees will be so grateful that they still have a job that they’ll work harder and be more productive,” he said in a press release.

That just isn’t true, according to the findings.

However, managers—who got high marks from employees for visibility, approachability and candor—can take some steps to soften the aftermath of a layoff, Murphy said.

“Managers need to be highly visible to their staff, approachable even when they don’t have anything new to say and candid about the state of things in order to build their trust and credibility.”

It’s important, he said, that managers are trained to deal with what he called the “highly debilitating” repercussions of layoffs or suffer lost productivity, quality issues and service breakdowns.

With layoffs and an unemployment rate at their highest levels in more than 15 years, employees are feeling more insecure and stressed, are experiencing less teamwork and heavier workloads, and feeling less valued in general, warn specialists in attitude research at Sirota Survey Intelligence.

It’s similar to what employees felt after Sept. 11, 2001, when there were 2,407 layoffs. The number of mass layoffs—50 or more workers laid off from an employer—hit 2,269 in Sept. 2008.

“It’s easy for management to say that employees are assets, rather than costs, in good times,” Sirota Survey Intelligence president Douglas Klein said in a press release. “But in difficult economic times when cutbacks are unavoidable, best-in-class companies demonstrate they mean it.”

They demonstrate this by:

  • Communicating. Secrecy or lack of transparency adds to an employee’s sense of powerlessness. Don’t delay confirming news of job cuts; tell employees why they are necessary.
  • Allowing employees their natural emotional reactions. Employees otherwise may release their feelings in nonproductive ways.
  • Proactively addressing the downside of less staff for the same amount of work. Involve employees in rethinking how tasks are going to be accomplished.
  • Demonstrating continued long-term interest in employees’ careers. Introduce stretch assignments and increase frequency of career-related discussions and possible advancement opportunities.
  • Using periodic, systematic employee attitude assessments. Assessments help management keep abreast of the impact of the layoffs on day-to-day operations and demonstrate employees are considered an important asset.

The specter of layoffs is not expected to diminish anytime soon.

Sixty percent of 633 HR professionals said their organizations expect to lay off employees in the next 12 months, according to a Society for Human Resource Management (SHRM) poll conducted Oct. 30, 2008. That’s on top of the 48 percent who said their organization laid off workers in 2008

Kathy Gurchiek is associate editor for HR News. She can be reached at


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