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Layoffs Breed Long-Term Employee Distrust, Study Finds

Being laid off causes long-term trust issues even when the employee gets hired by another company. The world-wide financial crisis of just a few years ago makes this a global crisis.

trusted. The agreement between worker and employer has changed from the expectations of post-war economies.

Flexible employment isn't going anywhere, especially in manufacturing.

So are enterprises stuck inflicting harm on their employees?

"What we think is particularly harmful about being laid off," Laurence writes, "is the involuntary aspect of it. People have no power over this, and this sense of powerlessness, that the decision is taken out of your hands, and that it is being done to you without your consent, is one of the reasons we think being 'laid off' is particularly harmful."

Laurence suggests that phased, voluntary redundancy -- like offering severance packages -- might be a more effective way of handling needed reduction in staff.

[Read about how IoT is changing enterprise IT.]

"Similarly," Laurence adds, "there is a lot of anecdotal evidence that being laid-off is particularly harmful when it comes out of the blue, so to speak. There are stories in the UK when people turn up one day at work and are told, sometimes just by e-mail, that they've been laid off. Again, these experiences are likely to be much more detrimental for individuals. So, preparing employees that layoffs may be occurring, entering into a dialogue with them, and especially providing phased voluntary redundancy options, may all go a long way to limiting the detrimental effects of redundancies."

Of course, a cynic might point out that enterprises don't really care if they foster distrust in employees. After all, they are laying these people off. They may never see them again. In fact, a true cynic might even say that it is a great way to seed a bunch of disgruntled, untrusting, unhappy workers on the competition.

Cynics could be right that many enterprises feel that way, but the problem is that with so many mass layoffs, this is now everyone's problem. Hiring has been strong the last year, meaning a bunch of untrusting folks are rejoining the ranks of the employed. If companies come together to treat this issue with more respect, they may or may not improve their current lot, but they may improve it in the future, since yet another global downturn will eventually occur.

There are a few natural limitations of the study. Due to the limits of the larger study the cohort was pulled out of, all of the work centered on people who were between the ages of 33 and 50. They were unable to make studies of younger or older workers. They also weren't able to study as of yet whether the effect improves over time (though they believe it probably does) or how long it is a real problem (it lasts at least nine years).

But even with the limitations of the study, this gives managers and employees plenty to think about.

Layoffs are inevitable. The damage is more long-term than we realized. Given their recent numbers, we have an awful lot of hurt people who are trying to put their broken confidence in the companies they work for back together. And inevitably, we'll have to do this again. Can we do it better? Can we work together to make this better for everyone? Or will we continue to distrust each other, fail to engage in our jobs, be less happy and healthy, and fail to meet our potential? A lot of it is up to managers and enterprises in how they treat the topic of layoffs in the future.

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