Retrenchment is a traumatic experience and not just for the people being retrenched. What we often overlook is the need to heal the team after layoffs. Why are the people who still have their job also impacted by the retrenchment? Simple, uncertainty creates anxiety. If it could hit you, it could hit me as well.
Let’s consider an example that happened recently. In this multinational organisation the global downturn led to a sharp decrease in demand and therefore big cost pressures on the business. A decision was taken overseas to retrench about 10% of the local workforce. To make it clear to staff here that the decision was taken at the highest level, a VP flew in from Europe to deliver the message, about the local retrenchment, to a meeting with all staff. The VP outlined the business need for retrenchments in great detail and highlighted that the Australian operation was sound and local layoffs were much less than in the other countries where the business is operating. The people laid off were informed promptly and provided with payouts and outplacement services.
From the perspective of this business they handled the retrenchment process with integrity and respect. A top level manager delivered the bad news and took responsibility on behalf of the executive for the decision. The people who were let go were offered support, treated ethically and with respect. Whilst we agree with the story to this point, we feel it is incomplete. The reason is simple and pretty universal across the businesses and organisations we have worked with: the impact on the people left behind is forgotten. We can only speculate as to the reasons why, perhaps the assumption is that the remaining staff will be happy to still have their jobs and so there is no need to do anything.
The reality tends to be different – survivors can also be traumatised. You will be well aware that emergency services offer counselling to their staff after attending to traumatic accidents or crime scenes. You will also be aware that schools offer counselling to students and staff in cases where a student is killed. The trauma does not have to be at the level of post-traumatic stress disorder, it can simply be anxiety about my own status (or my own mortality in the cases above).
Further, just because the immediate threat has passed doesn’t mean I don’t have to be anxious about the future. We have a great capacity for entertaining ‘What If?’ scenarios; and usually these scenarios are completely outlandish and have less chance of materialising than you being hit by lightning. But when economic conditions are poor and likely to deteriorate further, it is reasonable to entertain thoughts that the first round of layoffs is not going to be the last. What should be done, then? How can business provide reassurance to the remaining staff, heal the teams affected by the absence of valued contributors and decrease levels of anxiety that adversely impact productivity?
The three questions above already hint at the answer. Reassurance can be offered in two different ways; using a parent-child dynamic (‘I will take care of you’ or ‘All will be well’) or using adult rationalisation. Most businesses follow the second path, but tend to forget that the rationalisation is only effective if the emotion is openly explored first. When in the grip of pain or fear, we don’t hear rational arguments. We need to let the pain or fear (or anger) out first.
We recommend a process of guided conversation for this to take place, which can also cover the team healing (the feeling of grief and/or loss) and the anxiety about the future. As this is a reflective and emotional process, this is alien to most leaders and is better handled by external facilitators (with the leaders present, of course!). The aim is to work people at least part way through the grief cycle and to allow for the airing of pent up emotions to prepare the ground for fast rationalisation to take place (allowing people to move on).
Given that in most instances the employees who are left will be asked to do more to make up for the lost headcount, spending a small amount of money on such a healing process will pay off in a much faster recovery of productivity. Also, doing more with less requires creativity and when we are anxious our creativity shuts down and we revert to ‘what we know/do best’. So without a process of abetting anxiety, too many people will go into their cave; and recovery and creativity will be a long time coming.