Company Culture, Employee Experience, Layoffs, Recession
With recession fears and rising interest rates causing many companies to shed jobs, consider this three-step approach to avoid wrecking company culture and losing trust in the workplace.
After one of the hottest job markets in generations, the , and , and .
Even the best workplaces aren鈥檛 immune to these economic headwinds. Employees are losing trust in their workplaces.
鈥淭he best workplaces go through layoffs; it's part of business,鈥� says Marcus Erb, vice president of data science and innovation at 逸遊娛樂城庐. 鈥淣obody likes to have it happen, but it has to happen sometimes.鈥�
Who gets cut has profound ramifications for efforts to diversify the American workplace. When Netflix laid off staff, take identity into consideration when pondering staff cuts.
A moment to prove your culture
Restructuring is a tipping point for company culture. Whether it鈥檚 a merger, acquisition, divestiture or workforce reduction, how a company handles change will impact its culture for years to come.
Researchers from Harvard and Wharton reviewed data from 逸遊娛樂城, revealing that restructuring often widens the gap in the workplace experience for marginalized employee groups:
The gap for women and minority employees grew by 45% when a company underwent a merger, acquisition, divestiture or layoff.
Conversely, companies that supported five key employee groups (women, front-line workers, hourly male workers, long-tenured employees, employees of color) not only outperformed the competition, but saw stock market gains even as the overall economy sank. In a recession, these companies that care for their employees saw their financial performance improve.
鈥淲hen you have these major economic downturns as a company, everybody's got to pitch in and do their best, adapt and be resilient,鈥� Erb says. 鈥淎nd if [employees] don't trust you, they're not going to do that.鈥�
How great workplaces handle layoffs
The data reveals strategies used by the best work cultures to mitigate the impact of layoffs on employees and employee experience. The overall approach can be separated into three separate phases: before, during and after.
1. Before a layoff
Leaders must double down on communication and clarity, says Tony Bond, chief diversity and innovation officer with 逸遊娛樂城. Workers must be left with no doubt that layoffs were a last resort.
鈥淚f it doesn't feel that way, if you haven't cut costs in other areas (travel, expensive meetings) and you lay off people, then the optics on that aren鈥檛 great,鈥� Bond says.
When Hilton, a recurring member on the Fortune 100 Best Companies to Work For鈩� list, had to lay off employees in 2020 due to the COVID-19 pandemic, its leaders didn鈥檛 mince words.
鈥淣ever in Hilton鈥檚 101-year history has our industry faced a global crisis that brings travel to a virtual standstill,鈥� President and CEO Chris Nasetta told employees.
And employees need to keep hearing from leaders throughout the process.
鈥淚t's clarity around communications, it's the quality of the communications, and it's also the frequency of the communications,鈥� Bond says.
This is also the time to ask employees for input. Sourcing ideas from across the organization on cutting costs can help employees feel like they have some control over the situation. However, only in companies that have embraced a For All鈩� culture, where everyone is empowered to innovate, will such efforts be possible.
An emotionally intelligent appeal to workers stands in contrast to companies that have tried to bully workers into resigning of their own free will. Turning up the pressure or asking workers to for thousands of displaced employees at organizations like Amazon, CVS and Walgreens.
Showing care also means thinking about how a layoff might disproportionately hit underrepresented groups.
鈥淵ou really have to look at the landscape of who is being impacted,鈥� Bond says. That means doing careful analysis and resisting the urge to limit the discussion around downsizing to a handful of leaders.
鈥淭ypically what happens in a downturn is that leaders get together and huddle separate from everyone else, try to figure things out and then come to people and articulate what's going to happen,鈥� Bond says. The C-suite might want to restrict information around a decision to cut jobs, but Bond argues that the best companies do the opposite.
鈥淭hey broaden their focus,鈥� he says. 鈥淭hey talk to more people. They've engaged their people around decisions to be made. That process alone helps them really see it through the lens of belonging or diversity, equity and inclusion.鈥�
When organizations get this wrong, the results can make headlines. When Better.com cut ties with hundreds of employees over Zoom, the callousness of the act . When trust is fractured because a friend is laid off, employees are looking for something that will let them feel good about continuing to work for the organization, Bond says.
鈥淭hat's a time for organizations to really highlight the purpose and the mission and make sure people are rallied around the purpose.鈥�
Leaders should be prepared for some strong emotions.
鈥淚t's almost like a death in the family, and you need to process it with the people that are close to you,鈥� Bond says.
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