After a round of layoffs, remaining employees typically feel a range of emotions. On the one hand, they’re relieved to still have a job. Layoffs are stressful and can have life-altering impacts on workers and their families. On the other hand, no employee is really a winner in a layoff scenario.
Remaining employees will likely have lost close workplace friends and trusted colleagues, and their work may suffer, as well, if they’re mind is preoccupied with the possibility of future layoffs. Some may even look for work elsewhere if their concerns over the company’s health are strong enough.
According to a new study from the UBC Sauder School of Business, those who leave may lead many others to leave, as well.
Layoff Survivors May Be at Risk of Leaving
The researchers looked at employment data from a major retailer that was experiencing high turnover. The study included data for approximately 1 million employees, including when those workers were hired, which store, which position, performance evaluations, and when and why employees left.
“We looked at these stores as systems, and looked at the flow of employees in and out of them over time,” explained UBC Sauder Assistant Professor Sima Sajjadiani, who coauthored the study with John Kammeyer-Mueller and Alan Benson of the University of Minnesota. “It gave us a great opportunity to look at the immediate, short-term and long-term effects of each exit event, and compare them over time.”
The researchers found that layoff announcements have a strong and immediate impact on voluntary turnover among those who survive the layoffs.
It Pays to Be Proactive
“It’s very bad news for organizations, especially if they are laying off high performers, because if those positions get eliminated, both high and low performers start quitting,” Sajjadiani said. “It’s a signal that people’s jobs aren’t secure, and the organization doesn’t care about them, no matter how hard they work. So they think, ‘I should leave as soon as possible.’”
This data should be top of mind for employers when considering staff cuts. Sometimes layoffs are the best-available option, but it’s important to fully understand the broader impacts of a layoff decision—both on the company and on remaining workers—before pulling the trigger.
Lin Grensing-Pophal is a Contributing Editor at HR Daily Advisor.