Layoffs Breed Long-Term Employee Distrust, Study Finds - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
IT Life
News
3/20/2015
10:10 AM
Connect Directly
Twitter
RSS
E-Mail
100%
0%

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.

10 Hot Cities For IT Pros In 2015
10 Hot Cities For IT Pros In 2015
(Click image for larger view and slideshow.)

Starting in 2008, with the collapse of Lehman Brothers and the financial crisis that followed it, the US and many other parts of the world experienced one of the biggest rounds of layoffs since the Great Depression.

A new research article, "(Dis)placing Trust: The Long-Term Effects Of Job Displacement On Generalised Trust Over The Adult Lifecourse," suggests that the impact of those layoffs will be felt by the workforce for at least a decade to come and hurt employee trust, engagement, and even health.

What can employees and employers do about it now, and what can they do to avoid it the next time?

The employment study, conducted by Professor James Laurence of the Cathie Marsh Center for Social Research at the University of Manchester, England, looked at more than 10,000 people who were selected from the National Child Development Study cohort -- a long-term project that follows people born on a certain week in 1958. The cohort tracks their lives through surveys and interviews in an attempt to get long-term data about various factors of life in Britain.

One of the factors studied in the cohort is general societal trust.

Laurence’s study of the cohort found that being made involuntarily redundant -- in other words, being laid off -- contributed to distrust in workers for at least nine years after the experience, even after they had a new job. The study could not cover farther at this time, but there is no reason to think the impact couldn't go even longer. It also showed that other types of unemployment, including being "fired," didn't have the same effect -- showing that being laid off was an especially bad way to lose a job.

(Image: Geralt via Pixabay)

(Image: Geralt via Pixabay)

Trust is clearly a major issue both for society and the enterprise.

General trust as a trait usually leads to people being happier, more socially engaged, healthier, and better at their jobs. Distrust leads to less engaged, less healthy workers. It doesn't take a management genius to know that's not good for anyone.

Given the millions of layoffs that occurred four to seven years ago, a large percentage of the workforce may be suffering from general distrust of their own employers, a sense that they can't commit to their new employer because they can't be sure that their job is secure, and a feeling that they don't want to get burned again.

If you were laid off, or you are managing or hiring folks who were, you need to understand the phenomenon.

One thing to know is that trust is more likely to be lost in the types of people we tend to look for in the enterprise.

"One of the striking findings," Laurence wrote in an email to InformationWeek, "was that how being laid off affecting one's trust seemed highly dependent on their level of 'employment-centrality' -- that is basically how central one's job is to their identity, their sense of self and sense of self-worth. People who had higher levels of employment-centrality before they were laid off (for whom, in theory, work is much more central to who they are) were especially sensitive to the harmful effects of redundancy -- their trust decreased the most."

In other words, all of those go-getters everyone is trying to find, the ones who work the late hours and don't balance work and family life, are exactly the ones most likely to respond poorly to being laid off.

"As such," Laurence continued, "[one way employees can help themselves] may be diversifying one's sources of self-worth and meaning in life. Many of us are guilty of the adage 'living to work', I'm sure, and do derive much meaning form work in and for our lives. However, this leaves us especially susceptible to negative experiences within the labour market."

And one way employers and managers could help themselves is by accepting that the "best" worker for them may not always be the one that works insane hours. The face-time culture is being replaced with an always connected culture, but it is still the same problem.

The changing nature of work

Another issue is the nature of employment itself. Laurence suggests that the erosion of unions and more flexible manufacturing methods have created a sense that employment is no longer permanent or to be

Page 2: Can The Damage Be Fixed?

David has been writing on business and technology for over 10 years and was most recently Managing Editor at Enterpriseefficiency.com. Before that he was an Assistant Editor at MIT Sloan Management Review, where he covered a wide range of business topics including IT, ... View Full Bio

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Previous
1 of 2
Next
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
<<   <   Page 2 / 3   >   >>
jries921
50%
50%
jries921,
User Rank: Ninja
3/23/2015 | 6:02:07 PM
Re: No surprise
I'm not surprised at all.  It would be different if savings rates were higher (but then workers would feel freeer to quit when they didn't like their jobs), but, as the proverb says "once bitten, twice shy".

 
jries921
50%
50%
jries921,
User Rank: Ninja
3/23/2015 | 5:59:28 PM
Re: Everybody is replaceable
Nothing's free, not even cheap labor.  It may be that employee loyalty and pride of workmanship make up for the higher wages paid.  It may even be that the price of serial layoffs as an industry standard is an anti-business political climate with voters much less willing to give multinationals tax and other breaks than otherwise.

The invisible hand of Adam Smith is always with us; it's just that it manifests itself in many ways (even public policy), not just in direct buying and selling as market fundamentalists like to think.

 
David Wagner
50%
50%
David Wagner,
User Rank: Strategist
3/23/2015 | 5:50:32 PM
Re: Layoffs
@Broadyway0474- That research already exists. There's quite a lot of research how lack of trust changes your behavior across all aspects of your life-- work and home. But what is interesting to me is getting laid off effects your whole ability to trust, not just at work. It is frightening. People were asked the questions, "are people generally trustworthy." The answer went down for those that had been laid off. So it isn't just not trusting companies, it is trusting ANYONE which is kind of sad.
David Wagner
50%
50%
David Wagner,
User Rank: Strategist
3/23/2015 | 5:46:57 PM
Re: No surprise
@jries921- I think the surprise is how long it continues. I would have guessed that people reset once they are hired elsewhere. I'm a bit surprised it goes at least 10 years and possibly longer.
hho927
50%
50%
hho927,
User Rank: Ninja
3/23/2015 | 2:31:47 PM
Everybody is replaceable
Everybody is replaceable if they can find a equivalent replacement at much lower cost. It's human nature. We what quality things at cheap price.

The question is what make you unique, irreplaceable?
jries921
50%
50%
jries921,
User Rank: Ninja
3/23/2015 | 1:00:45 PM
No surprise
It made sense to test the hypothesis, but it would have been surprising if the findings had been otherwise.

 
xmarksthespot
50%
50%
xmarksthespot,
User Rank: Apprentice
3/21/2015 | 11:53:47 PM
Re: Layoffs
Thanks to brainyquotes website:

Trust everybody, but cut the cards. -Finley Peter Dunne

The trust of the innocent is the liar's most useful tool. -Stephen King
shamika
50%
50%
shamika,
User Rank: Ninja
3/21/2015 | 10:54:15 PM
Outsourcing
In my opinion outsourcing has been used as a major tool for staff layoffs.  Most of the multinational organizations use this concept now.
shamika
50%
50%
shamika,
User Rank: Ninja
3/21/2015 | 10:46:56 PM
Re: Layoffs
@sunita I like your idea. However most organizations now focus on profitability. Therefore they pay more attention on reducing cost.
shamika
50%
50%
shamika,
User Rank: Ninja
3/21/2015 | 10:44:15 PM
Re: Layoffs
I agree with you. It's also a difficult decision for an employer too. Sometimes this will lead to lose their best employees.
<<   <   Page 2 / 3   >   >>
Commentary
Learning: It's a Give and Take Thing
James M. Connolly, Editorial Director, InformationWeek and Network Computing,  1/24/2020
Slideshows
IT Careers: Top 10 US Cities for Tech Jobs
Cynthia Harvey, Freelance Journalist, InformationWeek,  1/14/2020
Commentary
Predictions for Cloud Computing in 2020
James Kobielus, Research Director, Futurum,  1/9/2020
White Papers
Register for InformationWeek Newsletters
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Video
Current Issue
The Cloud Gets Ready for the 20's
This IT Trend Report explores how cloud computing is being shaped for the next phase in its maturation. It will help enterprise IT decision makers and business leaders understand some of the key trends reflected emerging cloud concepts and technologies, and in enterprise cloud usage patterns. Get it today!
Slideshows
Flash Poll