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The Effects of Downsizing on Remaining Employees 


2022 has seen a series of layoffs from the likes of big companies such as Microsoft, Tesla, Ford, and Wayfair. Periods of workforce reductions can be difficult to navigate, and employee morale and team productivity often suffer. Organizations must first understand the effect that these big changes will have on their remaining employees. Ops leaders/people managers can make a significant impact by providing the right strategies and leadership to their staff.

The effects of downsizing on remaining employees 

1. A change in workload

When there is a significant reduction in staff, responsibilities often get added to the workloads of remaining employees. Without sufficient planning, this may come as a shock to employees, and in severe cases, it can lead to employee burnout. This can subsequently lead to a change in productivity as remaining employees are adjusting to their new workload. In fact, studies show that 74% of employees retained after a layoff have a decrease in productivity, 64% of surviving workers say the productivity of their colleagues has also declined, while 69% said that the quality of their company’s product or service deteriorated.

Another study found that 77% of surviving workers have an increase in errors and mistakes. Bottom line, companies need to be prepared to manage workloads, expectations, and priorities for the remaining employees.

2. Decrease in employee engagement and motivation

In some cases, a significant workforce reduction can kickstart ‘survivor’s guilt’ in the remaining employees. Using phrases like, “you should be thankful you got to keep your job” or “you are still lucky to be here” can affect remaining employees wellbeing as well as lead to a decrease in employee engagement and motivation. 

3. Less career developmental opportunities 

During times of workforce reductions, organizations are more focused on “surviving” rather than “thriving”. Because of this, career development strategies often take a hit. This can results in remaining employees heading for the door. In a recent study by McKinsey, lack of career development was the top reason employees choose to leave their jobs in 2021. 

How can organizations support remaining employees during workforce reductions?

1. Prompt managers to meet with employees frequently

1-on-1 check-ins should be conducted weekly or bi-weekly and should be focused on tasks. We recommend managers ask 3 core questions:

  • What are your priorities?
  • Do you have any roadblocks?
  • How can I help?

We also recommend implementing a separate monthly 1-on-1 that focuses on areas that extend beyond tasks and performance (e.g., well-being). Some questions managers can ask include:

  • How are you feeling?
  • Do you feel overworked or underworked?
  • Are there any adjustments that would help you be more productive?
  • Do you need any additional training or coaching?
  • Do you have any feedback for me?

These monthly 1-on-1s should not be overlooked – they show employees that managers actually care and value them. One important note about these check-ins: ensuring an environment of psychological safety is paramount.   

Did you know that since the lockdowns of 2020, HR professionals are reporting that 35.6% of their managers have increased the frequency of their employee check-ins? These check-ins are also extending beyond performance (touching issues such as employee well-being). Download our guidebook on The Current State of Performance Management to find out more interesting statistics.

2. Offer coaching/training to help managers navigate difficult conversations

Check-in conversations are challenging in general. Layer in other extraneous circumstances like team members leaving, and the conversations can be even more difficult. Coaching and training should be readily available to managers to help them prepare for difficult conversations and support their team members that may be struggling. (Feel free check out some of these resources: guide to difficult feedback conversations and conversational receptiveness). 

3. Be realistic about individual objectives and workloads

In periods of high departure, workloads and expectations on remaining employees can often increase. To avoid mismanagement of workloads and employee burnout, managers need to set clear objectives and prioritize tasks for their team. HR can support managers with a system (performance management software, Google sheets, etc) that can help document and track individual objectives. This system can also help flag employees that may be struggling to meet objectives.

Employee departures have a significant impact both on employees and the organization, but having the right strategies in place can help minimize employee disengagement and optimize employee productivity. What other strategies have you implemented to help support your staff?

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