Layoffs & Redundancies: A Human-Centered “How-To” for Leaders

Redundancies are one of the most challenging aspects of our working lives, whether we are being made redundant, one of the survivors, or the leader navigating and communicating this process. 

So, what can leaders do to minimize pain for those who leave? How can you ensure culture continuity for those who stay? And for the person who’s been made redundant, what steps can you take to heal, recover and get back into the driver's seat of your career?

On the latest episode of We are Human Leaders, we explore the impact of redundancies and the best strategies to deal with this form of workplace trauma with Business Psychologist, Consultant and Coach Leanne Elliott. 

Leanne shares practical tips and best practices for all of us to better understand more about the best ways to navigate one of the most damaging experiences humans can have at work.

The harsh reality of redundancy

Being made redundant raises all kinds of questions, as well as feelings like shock, anger and shame. Sometimes leaders handle redundancies well, and have robust change management processes in place to mitigate harm to everyone involved. 

More often, they don’t, making the process immeasurably harder for those on the receiving end. Redundancies are also complex for those who are left behind: you might feel survivors guilt – or the dread of not knowing if you’ll be next.

“Layoffs should be your last resort.”

Leanne is clear that redundancies should be a leader’s final resort in terms of cost-cutting. With good reason. “The thing to understand as a leader is that layoffs of any kind should be your absolute last resort.”

She underscores the research behind why layoffs should be far from top of the list for any leader. “Layoffs don't work from a people or a commercial perspective. Research shows that after layoffs, performance of the remaining team dips, morale dips, employee engagement dips, and teams lose trust in their managers.”

Instead, Leanne suggests exhaustively exploring other measures that will achieve the same outcome without loss of headcount. “Find other cost reduction measures: operational efficiencies, temporary salary cuts amongst the executive team, or even reduced working hours. Because layoffs are more disruptive than you will ever imagine.”

Have great change management systems in place

As we explore during this example-packed conversation, leaders often fail to manage the process well. At times, they also take a slow, incremental approach to layoffs. This can be incredibly destabilizing for the people who remain. As Leanne expresses, this approach “breeds ambiguity.”

She advises that leaders ensure they do not forget about the people who are left behind. Leanne points to some striking data around the enormous talent drain that often occurs after redundancies are made: “There is a strong risk that 30 percent of the people that remain are going to leave your business over the next 12 months unless you create a place where they want to be and re-engage them in the mission of the organization.”

For those who remain, redundancies can be traumatic, too

Further, leaders need to recognize that from a psychological perspective, the people left behind are going through a workplace trauma. “For those that remain, survivor guilt is real. As is imposter syndrome: ‘It should have been me’.”

Leanne suggest that leaders offer a similar level of wraparound care to those that remain: have conversations and support these people as they move through the process. 

She also implores leaders to take ownership of the reasons redundancies are happening.

“Acknowledge that redundancies are always a result of leadership error. Take accountability for that.”

Leanne reminds us that the person delivering this news will often be grappling with emotions including guilt, fear and shame, too.

“Give support to the leaders who deliver the news: this will be devastating for them, too.”

We also explore the steps to take if you have been made redundant. Leanne recommends that, where possible, the process not be hurried. She suggests, where possible, that people avoid the temptation to rush on into the next thing. “If you have some runway, take some space to think about ‘what do I want to do next?’ It can be a gift.” 

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