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Layoffs sour company culture. From lack of trust to reduced productivity, they can spur employees to disengage when businesses need them to deepen their commitment to performance and innovation.
As our global economy shifts, it’s paramount for leaders to pay extra attention to company culture to reestablish organizational purpose, values, and principles to maintain productive teams.
Here, we underscore how layoffs (or even news of layoffs at other companies) hurt employee morale. We also present tangible ways to boost employee engagement and belonging at a time when your company needs it most.
Why layoffs damage employee morale
Layoffs are inherently toxic to employee morale.
Employees who survive workforce cuts are often left feeling distrustful of their employer, anxious about their job security, and stressed about the added workload they must absorb from former colleagues.
Studies show that layoffs tank employee retention rates and spark voluntary turnover. And employees that do remain experience significant declines in motivation. According to a survey by Leadership IQ, 74% of employees who kept their job amidst a corporate layoff reported lower productivity, and 87% of surviving workers say they are less likely to recommend their organization as a great place to work.
Such statistics illuminate several important points that are vital for social impact professionals such as CSR, HR, and DEI leaders to acknowledge:
Organizational transition periods traditionally associated with cutting staff such as mergers, acquisitions, and uncertain economies provoke employee anxiety;
This anxiety causes stress, burnout, job dissatisfaction, performance decline, and employee attrition;
Even if your company isn’t planning layoffs, employees may still be anxious about their job security.
It’s therefore crucial for companies to continuously feed company culture in order to maintain high levels of employee engagement during economically turbulent times.
Social impact strengthens company values and culture
Social impact programming serves as a protective force field from the negative consequences of layoffs.
That’s why trailblazing businesses are rededicating their commitment to protect company culture by investing in well-researched initiatives designed to improve employee purpose, community, trust, and engagement.
By putting values to action through high-quality social impact experiences such as volunteering activities, lunch and learns, community mentoring sessions, DEI panels, kit building events, and more, companies communicate that their purpose and mission isn’t just a nice-sounding company statement living stagnantly on the corporate website.
Rather, an organization’s guiding principles may comprise a culture that defines how employees interact with each other, customers, and the wider community.
“A healthy culture serves as the glue that binds us together in good times and bad,” explains Douglas Ready, senior lecturer in organizational effectiveness at MIT Sloan. “It can also be the grease that facilitates innovation, fresh thinking, and resiliency.”
Fortifying social impact programming is a powerful way to create a sense of belonging and inclusivity at your organization. When employees connect over a shared experience, they create meaningful relationships and even friendships with their colleagues — proven indicators of healthy, high-performing teams.
This is all advantageous for your company’s bottom line. Businesses with highly engaged employees are more productive and more profitable than their competitors with disengaged employees, says Gallup research.
A robust social impact strategy is an effective way to shield your team culture from the uncertainties of a changing economic environment. “Remember that culture is not a constant,” says Douglas. “If it’s broken, you and your team can fix it together.”
Learn more about improving your company’s employee morale and culture with Visit.org. Reach out to our team today!
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