Redundancies, Lay-offs, Restructures: Consider the Consequences and Alternatives

In today's economic environment, more and more companies are reducing staff to save money. Harvard Business Review recently reported research on how these belt-tightening efforts affect a business beyond the short-term savings.

Layoffs have a massive impact on employee engagement and subsequent business success. For employees present at the time of a layoff, engagement doesn't return to pre-layoff levels, even after two years. Remaining staff wonder if they're next, and may feel betrayed, especially when redundancies come as a surprise because of poor leadership and lack of transparency.

The best place to start is to examine every alternative to restructures and redundancies. Many alternatives avoid this damage and can even strengthen loyalty, engagement and trust. Our consultants can help you understand the impact of different scenarios and plan hard fiscal decisions without harming your culture and staff morale.

Employee experience

• 16.9% drop in company confidence
• 12.1% drop in belief in career opportunities
• 10.5% drop in confidence in leadership

Impact

• Expect 18 to 24 months for engagement to rebound
• Expect increased turnover
• Performance setbacks and business uncertainty
• Decreased morale, motivation and loyalty
• Loss of trust: employees feel their employer doesn't care
• Risks to business reputation and operational sustainability