Layoffs and Furloughs: 4 Ways to Lessen the Blow

Week-over-week pulse surveys show that layoffs and furloughs due to the COVID-19 crisis have stabilized, yet negative impacts remain. Though these drastic measures are sometimes necessary, we’ve surfaced several mitigation tactics that can help revive a disheartened workforce.

First, the cold hard truth

During the Coronavirus pandemic, many organizations have had to face one of the most painful decisions as they determine how to safeguard their long-term viability—whether to let employees go.

Layoffs and furloughs are often necessary responses to major shifts in the market as CEOs attempt to protect the profitability of their companies (or at least minimize their losses). While these courses of action appear to have leveled off in recent weeks, the impacts have been severe.

As devastating as loss of employment is on the employees who receive the bad news, it can also significantly affect the employees left behind. Our study found that when organizations conducted a layoff or furlough in the past 30 days, employees suffered a 90.5% decline in employee Net Promoter Score (eNPS).

Other negative consequences of layoffs/furloughs included a:

36.4% increase in intention-to-leave the organization

57.2% increase in disengagement

20.3% increase in fearfulness

79.5% increase in feeling isolated

31.9% increase in feeling personally unproductive

But can the damage be contained?

As the numbers indicate, the employees left behind in a round of job reductions often feel much of the impact. Their jobs can become harder to perform, from additional tasks they may be expected to take on, to the psychological toll of working in a workplace culture of uncertainty.

It may seem that there is not much a company can do until the crisis has ended. Our COVID-19 pulse survey research tells a different story.

Waiting for the crisis to end does not improve employee feelings of fear, disengagement, or isolation. It doesn’t help employees feel more productive or more intent and staying with the organization in the future. Alternatively, our weekly study identified several tangible, proactive approaches that have already shown to greatly counter the damage to employee culture that layoffs and furloughs can inflict.

When organizations continued to prioritize recognition every week, their Net Promoter Score increased by 3.3% instead of declining by 90%.

4 ways to mitigate job reductions and lessen the blow

Following are four specific remedies we identified that are helping to lessen or neutralize the negative side effects of employee layoffs and furloughs during a crisis.

1. Continue to recognize great work

We found some organizations were concerned that recognition may appear insincere during a crisis—particularly when they have to lay off or furlough workers. This is a misconception. Yes, recognition should be carefully managed, but employees continue to show up and do great work, sometimes going above and beyond their regular duties. The truth is that they want to be appreciated during a crisis, even if it isn’t monetarily recognized.

When employees were recognized in the past seven days (agnostic to monetary or non-monetary recognition), several negative effects were greatly reduced:

3.3% increase in eNPS (as opposed to a 90.5% decline)

4.7% increase in intention-to-leave the organization (down from a 36.4% increase)

5.1% increase in disengagement (down from 57.2% increase)

22.6% increase in a tense workplace atmosphere (down from 41.6% decline)

7.0% decrease in fearfulness (down from 20.3% increase)

1.3% decrease in feeling isolated (down from 79.5% decline)

2. Be transparent with employees

Our prior research found that organizational transparency is paramount to preserving and supporting culture, even during challenging times. We discovered that lack of transparency caused employees to be 102% more likely to think their organization was unprepared for the COVID-19 crisis, and 25% more likely to worry about losing their jobs. Employees want to be informed of what’s going on and keep the communication channels open, even when the news is bad. This continues to be the case.

When organizations were rated as highly transparent, these negative impacts were reduced:

12.7% decline in eNPS (down from a 90.5% decline)

16.6% increase in disengagement (down from 57.2% increase)

2.3% increase in fearfulness (down from 20.3% increase)

24.4% increase in feeling like the organization is overreacting to COVID-19 (down from 188.1% increase)

12.6% increase in feeling like the organization was underprepared (down from 75.2% increase)

3. Focus on employee safety

Employees have found it important throughout the crisis to know that their leaders care about their safety and well-being. This has been especially true of non-remote employees and frontline workers who may be more exposed to the virus. Although paramount, this focus continues to decrease in our week-overweek surveys.

When employees felt like their organization was continuing to prioritize their safety, the following negative effects were partially mitigated:

16.6% decline in eNPS (down from a 90.5% decline)

13.5% increase in disengagement (down from 57.2% decline)

4.7% increase in fearfulness (down from 20.3% increase)

14.4% increase in COVID-19 obsession in the workplace (down from 48.5% increase)

7.7% increase in a tense workplace atmosphere (down from 41.6% increase)

18.7% increase in feeling the organization was underprepared (down from 75.2% decline)

4. Ensure leaders connect with employees

More than ever, communication is vital. Employees want to meet and discuss their ongoing work with their direct supervisor—and fairly often. During the crisis, we found that one-on-one meetings once per week offered the best results to employees, leaders, and organizations as a whole.

When frequent one-to-ones were put in place, these negative effects were lessened:

15.3% increase in intention-to-leave the organization (down from 36.4% increase)

7.1% increase in disengagement (down from 57.2% increase )

5.3% increase in fearfulness (down from 20.3% increase )

6.3% increase in feeling isolated (down from 79.5% increase )

6.1% increase in a tense workplace atmosphere (down from 41.6% increase )

21.4% increase in feeling personally unproductive (down from 31.9% increase )

Safeguard your company culture

Just as organizations need to protect the viability of their businesses, they need to protect the viability of their company cultures. Putting specific practices in place to counter the negative effects of layoffs and furloughs, including the four we’ve highlighted, is essential to the health of a workforce and the delicate state of company culture.

Stay tuned to our COVID-19 weekly culture pulse surveys for insights that will help your organization to weather the storm.