Globally, layoffs are happening in every other company. The fear of recession has caused many big brands such as Microsoft, Google, Tesla, Twitter, Netflix and others to lay off employees in big numbers.
Downsizing across the US has rendered many jobless lately. In India, the startup ecosystem is already feeling the effects of low funding. The edtech space, in particular, has been cutting its workforce drastically.
While the employees who lose their jobs have their own set of challenges, not much thought is given to the employees who remain.
With so much uncertainty at the workplace and their future shrouded in ambiguity, the ‘surviving’ employees undergo a lot of stress too. They are gripped by the fear of who the axe is going to fall on next. This naturally impacts their engagement and productivity. Their focus at work gets disrupted.
“During mass layoffs situation, it is usually the experience of the HR heads— who have witnessed such situations in their careers earlier — that comes in handy”
Rajesh Balaji, CHRO, Matrimony.com
A study by the US Bureau of Statistics shows that during COVID times, in 2020, when many industries started laying off people in thousands and several employees lost their livelihood, one third of the population was left suffering in anxiety. In fact, about 22 per cent believed they would lose their jobs.
The environment in organisations where mass layoffs happen makes employees anxious and tense.
Emmanuel David, senior HR leader, has witnessed such situations and agrees that layoffs are perceived as negative, and therefore, the existing employees are also filled with negative emotions.
In such situations, the performance does go down and many employees start to look out for other opportunities.
However, layoffs are a harsh truth that we all need to accept, whether we like it or not. It is impossible to guarantee that there would be no layoffs in the future, but like the popular saying goes, ‘the show must go on’.
We will have to admit that layoffs are happening and will continue to do so. After all, organisations need the right sets of skills to stay afloat. Similarly, we also need to pay attention to the remaining employees, who need to stay engaged and focussed on their work.
“Handling the existing employees and their emotions does become a challenge for the organisations and the HR in such cases,” admits Kinjal Choudhary, CHRO, Cadila Pharmaceuticals.
“We need to be upfront and keep the employees updated about the financial wellbeing of the organisation from time to time, so that everything is transparent for all to see”
Jai Balan, former HR head, Bharti AXA Life Insurance
Four key factors organisations will need to follow, to keep the remaining employees in the right spirit are as follows:
1. Downsize the right way
Many of the HR leaders that HRKatha spoke with, are of the opinion that if companies are fair in their downsizing process, and handle the exercise with respect and dignity, the psychological impact on the existing employees is not as bad.
“Keep the downsizing process fair and be as objective as possible,” advises Chaudhary. He further explains, “It is best to move away from subjective decision making while deciding who is going to stay and who will leave”.
This will show the employees the amount of fairness on the organisation’s part, and ensure their trust in the company remains on the higher side.
2. Refrain from overcommunication
The times of layoffs are gloomy and full of anxiety and ambiguity amongst employees. Many companies tend to overcommunicate about the situation the company is going through and the reasons behind the same.
“We need to be upfront and keep the employees updated about the financial wellbeing of the organisation from time to time, so that everything is transparent for all to see,” says Jai Balan, former HR head, Bharti AXA Life Insurance.
There will be different phases at which the company will need to communicate various messages. During the layoffs, companies will need to maintain transparency in terms of the selection criteria of those being asked to leave. This helps the employees be mentally prepared. Secondly, the employees should be told exactly how long the layoff process will last.
“Keep the downsizing process fair and be as objective as possible to sustain trust of existing employees during layoffs”
Kinjal Choudhary, CHRO, Cadila Pharmaceuticals
After the downsizing ends, the existing employees need to be made familiar with what is going to be the way forward for the company, their future in the company and the overall vision of the organisation.
3. Ensure engagement at all levels
Rajesh Balaji, CHRO, Matrimony.com, shares with HRKatha that very often, organisations with experienced HR professionals and leaders who have seen the 2008 recession and related repercussions, are better prepared for such scenarios. They have special task forces to keep the engagement level of employees high at all times.
“During such times, it is usually the experience of the HR heads— who have witnessed such situations in their careers earlier — that comes in handy,” asserts Balaji.
Engagement will need to happen in multiple ways. Balan also mentions that many companies try to be prepared before they do a mass layoff. “They reskill or cross-skill employees to move them into different roles in the company,” Balan shares.
As far as possible, learning engagements should be open to all remaining employees. “This way, the employees are also upgraded and equipped to take larger roles in the company or move into newer roles,” points out Choudhary.
Another way to keep the existing employees engaged is giving them extended responsibilities in the company. “Rather than keeping people idle, give them extra work so that they keep themselves engaged,” suggests Balan.
“During mass layoffs, your best employees are also hard retain, which is a big challenge”
Emmanuel David, senior HR leader
4. Retain the best employees
“Another challenge is to retain the best or top employees in the company during such situations. This is because companies tend to lose their best employees during times of crisis,” says David. The best of the talent is always in demand. During crises in the industry too, companies will always want to hire the best performers.
According to Balaji, keeping the compensation level of all the top performers — who would constitute about 20 per cent of the workforce — intact and stable even amidst layoffs and other crisis situations, is a good strategy.
Choudhary draws attention to the fact that nowadays, many companies train their managers on ways to communicate information to employees.
Laying off people and handing them pink slips is a challenging task for the HR. At the same time, keeping the morale of the remaining/existing employees high in such a situation is equally challenging. In fact, it is as important if not more, for the future of the company.