How to Ease Workers' Fears About Cutbacks and Layoffs

February 05, 2009

Keeping your employees focused on the work can be a real challenge these days.

With more companies announcing cutbacks, layoffs and closings almost every day, workers are fearful their jobs might be next on the chopping block.

Many people have reason to be concerned as over two million jobs have been lost in the past year. Last month alone, U.S. companies announced over 200,000 job cuts; 71,000 in Canada.

What’s even more frightening than the numbers though, is the fact that virtually every industry and economic sector has been affected. Even normally secure sources of employment such as state and local governments are cutting programs, forcing employees to take unpaid vacations, and eliminating positions.

Clearly, employees everywhere are on edge. In fact, nearly 9 in 10 employers (88%) now acknowledge their employees are feeling the stress, according to Free & Clear, a company based in Seattle, Washington.

Not that workers are prone to talking about it. For the most part, people are quiet, in part because they don’t know what to say. But I suspect that some are afraid that merely talking about the potential for job cuts could somehow make it a reality. If you think people aren’t panicked, just look at the low turnover rate most organizations are seeing today. Unlike a few years ago, people today are staying put, hanging on to whatever job they have believing that any job is better than no job at all.

When people are worried, productivity suffers.

The issue for you of course, is how does all this affect your ability to get the work done.

We know that when people are worried and distracted, they don’t perform as well on the job. And there is plenty of evidence that the current economic outlook is taking its toll. A national survey conducted two months ago by Workplace Options for example, found that almost half of all respondents (48%) admitted that the stress of finances makes it harder for them to do their jobs as well as they can.

So, what can you do?

There isn’t much you can do to change the economy, of course. And you may not be able to prevent cutbacks from occurring in your own organization. What you can do however, is help people cope with the situation.

Most people understand that any organization can fall on hard times. They know that even in a growing economy, it’s possible to encounter an unexpected setback. And they can accept that provided they feel they are being treated fairly.

Specifically, people need to feel that someone cares about them and is making an honest effort to look after their interests, even if there is no guarantee that in spite of those efforts they still could end up losing their job or otherwise be adversely affected.

Second, they need to have confidence in management’s ability to fix whatever problems the organization is facing. They need to know a workable plan is in place.

And finally, they need to feel comfortable that the pain will be felt equitably across the organization. Many companies have found for example, that workers would rather sacrifice a portion of their own pay than see others laid off work.

Start by building trust and confidence

To help people cope with economic uncertainty, you have to start by building their trust and confidence. You have to make them feel like someone cares about them.

Here are a few tips on how you can do that.

1. Talk about it.

Don’t wait for employees to take the first step. As suggested earlier, many may be reluctant to broach the topic. And to avoid any mention of current economic conditions or their effect on your organization is to ignore the elephant in the room. It’s on everyone’s mind but no one wants to talk about it.

Ask people what they are feeling. Give them an opportunity to voice their fears and to vent their frustration.

Talking is healthy because it gets everything out in the open. It’s the first step toward building trust and confidence with people.

2. Be Candid. Be positive.

Be honest when discussing your company's situation. People are generally more tolerant of bad news than they are of the feeling that they are intentionally being kept in the dark.

It’s okay for example, to acknowledge that the future is uncertain; to explain any potential for cutbacks or layoffs; and to caution people that things could get worse before they get better.

At the same time, it is important to remain positive. Provide reassurance that things will get better. And help people maintain a healthy perspective. It’s not the end of the world and whatever happens, we (and they) will get through it.

It’s also helpful if you can pledge your help and support as needed.

3. Develop a plan

This is where you can give people a sense of empowerment.

Organize one or more group sessions and brainstorm ways to cut costs or increase your department’s effectiveness. Or simply invite workers to offer suggestions. Anything you can do to help workers feel more in control of their own destiny will give people greater confidence. You may find this is a perfect time to stimulate creative thinking and innovation in your organization.

4. Maintain a sense of normalcy

Try to carry on activities as normal. Rather than eliminating “non-essential” activities, such as training programs, social events, and team-building exercises, look for low-cost ways to continue them. For example, you can replace off-site or formal training programs with lunch-and-learn sessions.

To the extent possible, involve people in the planning of these events. Not only do you get the benefit of more ideas, it also brings people together with a common goal. In fact, the brainstorming sessions mentioned above can actually constitute a form of team-building.

5. Provide visible measures of support

I have been impressed by stories of managers who have found ways to help their people get through tough times.

Some have organized support groups to help employees cope with a whole range of problems and issues, including personal debt, bankruptcy, family relationship issues, health problems, weight-loss and many other sources of stress.

Others have conducted swap groups, arranging for employees to bring unwanted items from home in a kind of white elephant gift exchange.

Still others have arranged for their workers to receive financial and credit counseling, either through the company’s Employee Assistance Program or by a financial planner in the community.

All of these measures go beyond simply lending encouragement and psychological support. They demonstrate the many tangible ways you and your organization can help people cope with uncertainty and adversity.

By providing these and other forms of support, not only can you help ease fears and concerns of your workers, you will be taking positive steps toward helping your organization get through difficult times.

Stephen K. Foster, Ph.D., SPHR
Canopy Software, Inc.
1493 Market Street
Tallahassee, FL 32312
(850) 294-5513

E-mail me at: Steve.Foster@ExpertSupervisor.com.