Facing Layoffs 8 Tips to Manage Employee Morale During Troubled Times


Bad things happen. When markets contract and revenues decline, costs need to be cut. In many organizations that means people have lost or will lose jobs. It’s a harsh reality. Unless you manage engagement wisely, you can expect employee morale to take a turn for the worst.

It’s a changed work environment. Cost cutting. Fewer resources. Layoffs. Remaining employees expected to do more with less. There’s increased stress, job insecurity, sympathy for departed colleagues (sometimes guilt), increased workload. And there’s a reaction against the organization for having fired friends, for having laid off a colleague, for having dumped the work “on me.” Everybody remaining in the organization is re-evaluating their situation. Even the most engaged.

Similar to Maslow’s hierarchy of needs, employee engagement starts with meeting the most basic survival needs (read compensation) then moves up the pyramid through security, belonging, feeling a sense of importance and accomplishment, to achieving full potential at the pinnacle. In troubled times, this all collapses. Employee morale plummets. People revert to survival and security. Is my job secure? Does the organization care about me?

Sadly, the behavior of most organizations during layoffs and restructuring is predictable. Management time is spent planning, restructuring and worrying about the people moving on. Those people staying are often forgotten, lost in the upheaval. Why? Because of potential legal consequences and benign neglect.

Communication which is typically viewed unfavorably by an average 30% of an organization’s workforce in the best of times, becomes infinitely worse. Bad news is kept secret until the very last moment. Why? Fear of rumors and /or media leaks. But rumors start and are far worse than reality when left to imaginations. And without communication, trust in leadership declines.

Training and development are suspended. Why? They’re viewed as discretionary expenses, an easy cost-cutting move.

Individual roles are changed and reassigned; the mantra is to do more with less, handle the same workload with fewer people. Why? Because of an unwillingness to revisit capacity and the fact that it’s easier to re-allocate than reduce.

Output and production takes precedence, the impact on remaining workers is ignored. Why? Chiefly because managers haven’t been trained how to handle the psychological side effects of troubling times.

Best practices to maintain and even improve employee engagement during tough times

Shift the focus. Plan around those who are staying as much, or more, than those who are leaving.

Understand employee morale is low and priorities have changed.  Meaningful work and professional growth pale against the possibility of losing a regular paycheck.

Here are eight tips you can use to help employees cope and come through with resilience:

1.   Address barriers to innovation – involve employees even more.

Consult and include staff in discussions around reallocation of tasks. They have the best knowledge, the first-hand experience, and probably some excellent suggestions too. (A lesson learned the hard way: to centralize and contain costs the executive team behind one of Canada’s top five charities met behind closed doors and made plans for the big reveal without consulting any staff, middle-management included. When the time came to share restructuring, mid-management was slighted, there was no buy-in and restructuring took far longer than it should have).

2.   Focus on open, honest, two-way communication.

Don’t hide information or procrastinate, be as transparent and forthcoming about plans and market conditions even (and especially) if more lay-offs are possible.

3.   Coach those who haven’t worked through a troubling crisis.

It’s a good opportunity for older workers to mentor and share experiences.

4.   Emphasize how each person is valued and necessary to the organization.

5.   Set clear direction.

Even if that direction is survival, ensure everyone knows their role and importance and how their contribution links with that direction. Set short-term milestones: “What do we need to do to get through the next month? The next quarter?” And celebrate successes often.

6.   Maintain and maybe even augment the commitment to wellness.

Acknowledge and help employees manage higher stress levels.

7.   Improvise career growth, training, and development.

Cross training and job shadowing, for instance, can improve versatility and efficiency.

8.   Keep recognizing and rewarding performance.

Those congratulatory emails and pats on the back all work towards fostering a sense of security and stability.

Be as open, honest, transparent and forthright as you can be. Once change has happened and you’re reasonably certain you’re coming to the end – bend over backwards. Make sure those employees staying understand how important they are. If done right, it can make all the difference to employee morale and overall engagement.

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