Can employee trust survive a layoff? A new study uncovers what employees really think during layoffs.
What’s the worst experience of your life?
For 80% of respondents to an INTOO study released today, it was being laid off. Seventy-eight percent said their company didn’t do enough to support them during the layoff process. Sixty percent feel that their company’s leaders lack empathy toward those affected by layoffs. Another 54% don’t trust their company’s leadership team to act ethically and with compassion during layoffs.
No one would expect being laid off to be a happy moment, but does it have to be so awful?
Sadly, layoffs are a fact of life—and people know it. Fifty-three percent of respondents said they were concerned about being laid off in the next 12 months, and these fears are not unfounded. Fifty-seven percent of HR leaders admit their company is considering layoffs within the next 12 months.
After a layoff, employee trust ebbs, burnout can increase and quiet quitting can become an attractive option for many workers. All of these factors undermine morale, performance and productivity at a pivotal moment.
Layoffs will never be fun, but handled with care for the dignity and support of those laid off, they don’t have to be traumatic. What follows are my takeaways from the research and how companies could make layoffs marginally less painful for everyone involved—both those who leave and those who are left behind.
Laid off: by the numbers
If you’ve been laid off or witnessed the layoff of a family member or friend, your fear of layoffs is 1.5 times higher than that of those who have never personally experienced it.
82% of employees say most employers don’t care if laid-off employees get another job.
Of all respondents, both those who experienced layoffs and survived cuts, fully 33% say their company did “as little as possible” to support their exiting employees. This is despite 77% of HR leaders saying their company strives to be exceedingly fair during layoffs. Clearly there’s a disconnect here.
Encouragingly, another 33% said that the company went above and beyond to treat everyone well during the layoff process, and 42% said they did more than was expected.
A culture killer
A healthy company culture is built on trust, which inevitably suffers during layoffs. Eighty percent said companies underestimate the impact layoffs have on those whose roles survive the cuts.
INTOO broke out the results into several categories:
- Retention: 71%—including 82% of Gen Z—would begin job hunting immediately after a layoff, even if they didn’t lose their job.
- Productivity: 44% report that layoffs had a negative effect on their productivity.
- Engagement: Following a layoff, nearly 1 in 6 employees admit to quiet quitting.
- Employer brand: Trust was diminished by 62% after layoffs.
- Burnout: If their company laid off employees, 27% would try harder to prove their value. Additionally, 51% say that if they were laid off, their remaining colleagues would have to take on their tasks.
The larger fallout
The reputational risk of layoffs can be significant, with almost 1 in 5 employees—and 1 in 4 Gen Z employees stating that if they were let go, they would broadcast their layoff experience on social media.
65% of HR leaders worry about this happening and 49% of companies represented have had it happen on platforms including LinkedIn, TikTok, Facebook, Glassdoor, Reddit and others. Fifty-eight percent of HR leaders think their company could be doing more to stop online retaliation before it happens.
But the damage doesn’t stop there. Seventy-one percent of employees would never consider returning to an employer that laid them off.
Among employees who had been laid off, half (51%) retaliated with actions to mar the company’s brand. Telling friends and family not to work for that company, leaving negative reviews, and complaining on social media are examples of these actions. Among Gen Z workers, that number jumps to 70%.
Companies must think long and hard before moving forward with layoffs. Even if inevitable, layoffs will affect far more than just employees and the internal culture.
Making layoffs better
The report argues that offering outplacement support to exiting employees is vital to demonstrate care for people and contain reputational risk. Such services are supported by 88% of HR leaders and 86% of employees.
Meaningful outplacement services include help with personal branding, interview practice, personalized coaching, financial planning resources, career workshops and webinars, and entrepreneurship or retirement support.
Unfortunately, outplacement support is only available from one-third of global employers in the study. It’s slightly better in the U.S., where 42% of employers offer it. Fifty-eight percent of HR leaders surveyed worldwide agree that their company doesn’t provide enough support to employees during layoffs.
Leading through layoffs
I’m no stranger to making hard business decisions. I’ve led my company for 25+ years and we’ve had to make some tough calls along the way—but my employees always came first. I’ve never had to let anyone go, but I understand the pressures that could force the company’s hand. If that day ever comes, I hope my employees would know I’d never do this willingly—and that I am committed to supporting them into their next chapter.
If you’re considering layoffs, how they are experienced is a direct result of your existing culture. How they’re handled will have a direct impact on the future culture. It behooves all leaders to make these decisions with care and treat everyone involved with a high level of empathy, respect and fairness.