The owner of the industrial distribution company says he survived three layoffs at a manufacturing firm in the 1980s. The work didn’t disappear, so he worked harder for less money and lived in fear of being in the next group of employees asked to leave. “People need to come to work happy and motivated,” he says.
 
How layoffs are handled makes a huge difference in the productivity and morale of remaining staff. These days, layoffs are not unusual, which means that although they might not surprise those who are laid off, the fear of being laid off is always present. In a recent survey, 60 percent of respondents said they were afraid of losing their jobs.
 
Some companies have the attitude that those remaining “ought to be happy to have a job.” “I think that’s a simplistic short-term mentality,” says John Salveson of Salveson Stetson Group. He says that many leaders are so relieved to get through layoffs they often forget to pay extra attention to workers who are still employed. “The employees who stay with your company often must take on more work with fewer resources – while still reeling from the loss of their colleagues,” he says.
 
The so-called survivors will watch carefully to see how employers treat outgoing employees – starting with how employers let them know they were laid off. “You have to treat people with dignity and with respect,” Salveson says. “The people remaining with the company are going to be watching you like a hawk,” Salveson says.
 
Constant contact with those who remain is key. Companies that tell those who remain why they implemented layoffs and acknowledge that those who remain are upset, will benefit from the honest. Best practices dictate providing your employess with the bigger picture. Outside of layoffs, what is the company doing to improve its financial position? Run down a list: renegotiating leases, cutting management salaries by x percent, and so on.
 
Employers should avoid painting the situation as “gloom and doom” or the best people may leave, Combs says. “But we want to draw a realistic picture, and you want them to know it was hard (to make the decision).” Employers should acknowledge they don’t expect the remaining 80 employees, for example, to do the job the company was doing with 100 employees.
 
“Tell them that you give them permission to look at their jobs and let you know what you should keep doing, and what you will stop doing because you no longer have time to do it, or you now have no support. Empower people to rework how they doing things,” Salveson says.
 
One distributor says he has tried to be honest with employees who remain. He posted a monthly chart tracking the company’s financial progress and held regular meetings. The company’s state has stabilized, so he hopes no more layoffs will be necessary. But if an employee asks whether there will be more layoffs – and they will – Salveson says to avoid saying, “No.” Tell the remaining employees that you hope not, but that you can’t predict what will happen, Salveson says: “Employees know you can’t say no.”
 
Employees can be asked to help mitigate the impacts of current conditions. One example: asking a particular department to cut x amount from their budget. They may know where waste is better than company leaders. A controls distributor says the initial announcement that the company was doing layoffs inspired those remaining to step it up a notch. After a 10-minute layoff talk, the employees discussed how they could improve sales and margins, and solve other problems. “I think they rallied around it.”