In today’s corporate landscape, big companies often face the challenging task of maintaining a positive employee value proposition (EVP) amidst layoffs and negative press. The EVP represents the unique set of benefits and rewards that companies offer to attract and retain top talent. However, when companies experience a series of layoffs and unfavourable media attention, their EVP can suffer significant damage. This article explores the consequences of layoffs and bad press on big companies’ EVP and discusses strategies to rebuild and enhance them.
Layoffs, often driven by cost-cutting measures or strategic reorganisation, can create a ripple effect on a company’s EVP. When employees witness their colleagues being let go, they may experience a decline in morale, job security concerns and decreased trust in the organisation. Layoffs can also result in increased workloads for remaining employees, leading to stress, burnout and decreased job satisfaction.
Moreover, bad press surrounding layoffs can further tarnish a company’s image and reputation. Negative media coverage highlighting employee dissatisfaction, unfair practices, or inadequate communication during layoffs can create a lasting negative perception among current and potential employees. This negative sentiment can make it challenging for companies to attract and retain talent, as job seekers may be hesitant to join an organisation with a tarnished reputation.
Ashish Pinto, CHRO, Nesco, says, “It is true that many large organisations today are facing challenges that compel them to make difficult decisions, such as layoffs. These decisions are often driven by financial considerations rather than a willingness to let go of employees.”
Financial pressures force organisations to take drastic steps, and this is the primary reason behind such actions. Some companies may also succumb to herd mentality and follow suit, even when they don’t face immediate financial challenges, believes Pinto.
“The tech firms may make offers only to revoke them later, which is a prevalent issue in today’s job market. These challenges are more pronounced in tech firms, as they are some of the largest employers and often come under the spotlight for their actions.”
Ashish Pinto, CHRO, Nesco
Pinto also adds that certain organisations, particularly in the tech industry, may not exercise enough caution and sensitivity when dealing with growth and manpower. “The tech firms may make offers only to revoke them later, which is a prevalent issue in today’s job market. These challenges are more pronounced in tech firms, as they are some of the largest employers and often come under the spotlight for their actions. It is important for organisations to be mindful during their growth phase and handle their workforce with care and sensitivity.”
Consequences of loss of EVP
The erosion of a company’s employee value proposition (EVP) due to layoffs and bad press can have far-reaching consequences.
Issues in attracting talent: It becomes challenging for the company to attract top talent. Skilled professionals prefer organisations with a positive employer brand and a reputation for treating employees well. A damaged EVP makes it harder to compete for the best candidates.
Disengaged employees: Employee engagement tends to decrease when layoffs and negative press create uncertainty and diminish trust. Employees may become disengaged and less motivated to perform at their best.
Increased turnover: A weakened EVP often leads to increased turnover rates as dissatisfied employees actively seek opportunities elsewhere.
Surge in hiring costs: Talent drain not only affects the company’s workforce but also results in higher recruitment costs.
Loss of team spirit: Negative EVP can impact the organisational culture. Collaboration, innovation and teamwork may suffer as employees prioritise self-preservation over collective success.
Therefore, it is crucial for companies to address these issues and rebuild a strong EVP to retain top talent, foster engagement, reduce turnover and maintain a positive organisational culture.
Sriharsha Achar, CHRO, Star Health & Allied Insurance, says, “Prospective employees have become more cautious and scrutinise organisations before considering employment opportunities with them.”
He points out that in certain regions, such as India, there may be a tendency to tolerate nonperformance within organisations, which can hinder agility and competitiveness compared to other parts of the world. To succeed in today’s dynamic landscape, individuals must navigate internal dynamics. They need to negotiate based on their work performance rather than rely solely on personal relationships.
How can EVP be rebuilt?
To rebuild and enhance the employee value proposition after layoffs and bad press, companies can take proactive steps.
Communicate: Transparent communication is key, as it fosters trust and understanding. Companies should openly communicate about changes, provide support to affected employees and ensure consistent messaging both internally and externally.
“Employees are expected to continuously prove themselves and adapt to ever-changing circumstances. It is understood that organisations are profit-driven entities, and layoffs may be an unfortunate necessity.”
Sriharsha Achar, CHRO, Star Health & Allied Insurance
Prioritise employee well-being: Investing in employee-assistance programmes, wellness initiatives and work-life balance measures creates a supportive work environment. Reinforcing organisational values, such as ethical practices, diversity and inclusion efforts, and corporate social responsibility initiatives, helps regain credibility and positively impacts the perception of the company. Offering employee development and growth opportunities demonstrates a commitment to the workforce and enhances the EVP.
Offer growth: Training programmes, mentorship opportunities, and clear career-progression paths can facilitate employee retention. Additionally, showcasing positive employee experiences through internal and external channels and encouraging employees to become brand ambassadors can counteract negative press and rebuild the company’s image as an attractive employer. By implementing these strategies, companies can rebuild their EVP and regain the trust and engagement of their employees.
Build trust: According to Achar, building trust is paramount in a highly competitive environment where every moment counts. “Employees are expected to continuously prove themselves and adapt to ever-changing circumstances. It is understood that organisations are profit-driven entities, and layoffs may be an unfortunate necessity. However, it is crucial for companies to strike a balance between financial goals and employee well-being, ensuring that the value proposition remains intact,” asserts Achar.
