7 Tips for Maintaining Morale While You Downsize Your Workforce

by Mike O'Neill

You’re facing workforce layoffs following your decision to downsize. Chances are this hasn’t been an easy decision for you to make. You don't want to, but here you are, preparing to downsize and lay off part of your staff. 

If you don’t handle this sensitive process correctly, it will likely cause significant disruption to your business. Layoffs make for a stressed-out workplace. Employees start to get anxious, unsure of what to expect or plan for because they may feel like they'll be the next one to go.

Even employees who believe their jobs are secure may still feel the stress of the downsize. This situation is disruptive by its very nature and tends to leave your distracted employees unmotivated to do their work.

The real question is how downsizing is done, rather than whether to downsize. Companies that downsize through buy-outs and attrition, that help their workers get new jobs, and that sometimes provide outplacement services, end up much better positioned than companies which simply wield the ax. [They have] a better chance of retaining the loyalty of the surviving workers. Trust is one of the most valuable yet brittle assets in any enterprise. So over the long term, it’s far better for companies to downsize in a humane way.

// Robert Reich //

Downsizing is never easy, but business owners and leaders can effectively maintain productivity levels and morale among staff members even when times are tough by following these seven tips for maintaining morale while you downsize your workforce.

7 Tips for Maintaining Morale

#1 Be Transparent and Communicate

When downsizing plans are in motion and employees are being laid off, your management team must be as transparent as possible. 

To do this, hold group meetings to let your employees know why you are downsizing and laying staff off. Be completely honest and real with them. 

Let’s say your company got hit hard due to COVID-19, and revenue is down — tell them. If your company lost some of its most significant accounts, tell them. Whatever it is, tell them. Being transparent earns respect and trust. 

“Most people are loyal first to their manager, then to their company.” - Harvard Business Review

Remaining transparent helps keep rumors to a minimum, which can reduce worry and distraction. Employees will likely stay engaged and be more positive during the downsizing when they’re not trying to guess what’s going to happen next.

#2 Be Forgiving and Focus on the Good

Once the downsizing has begun, and you’ve made the layoff announcement, do not expect to return to business as usual from then on. When employees have the knowledge they’re getting laid off, they’re not likely to put in 100% of their work effort. 

Focus on positive actions that’ll keep your employees engaged. Set benchmarks to help with productivity and focus. Allow employees to know what the benchmarks are and continue to tell them when they meet expectations. 

Address this consistently and provide employees with real-time feedback. Being consistent keeps projects aligned, and employees focused on their most important tasks.

#3 Be Giving and Make Sacrifices

No matter how well you handle this process, you can expect to have some resentment and animosity among the remaining employees. 

Managers can address this by giving back and making some small sacrifices for their employees. By giving back and making concessions, you can help maintain morale while you downsize your workforce. 

For instance, offer a flexible work schedule. At first glance, this might look impossible with a smaller team — it’s not. Something as simple as allowing remaining employees to alternate their work hours for an extended lunch hour or a later starting time will do. It might take some time to coordinate, but giving the employees this option can raise morale. 

You can also surprise your staff with an occasional team breakfast or lunch. Around the holidays, be sure to show your gratitude for all of their hard work in these difficult times.

#4 Have a Plan and a Vision

With fewer employees, it won't be easy to run the business at first. It simply can't function the same way it did before you downsized. Consider having a 30, 60, and 90-day plan so you can smoothly transition and reorganize remaining employees into new roles and keep business projects from falling behind. 

Where possible, cross-train staff, so that remaining tasks and functions aren’t disregarded when employees who were previously responsible for those tasks get laid off. Make sure these tasks are assigned in a fair and balanced way between remaining team members. You don't want one person to feel overworked while another feels underutilized.

#5 Let Everyone Know Where They Stand

After you downsize your workforce, the remaining team members may be experiencing some insecurities. Now they’re possibly afraid to express their feelings for fear you’ll see this as a weakness, and they’ll be the next to go.

Whether anyone comes forward to express their insecurities or not, you should take the initiative to put their worried minds at ease. Let each team member know exactly where they stand, what you expect of them, and any new job responsibilities they may have. Be open to their questions and concerns. Respond genuinely and continue to be transparent.

#6 Monitor and Evaluate

Evaluating attempts to maintain morale while you downsize your workforce is never easy. It’s natural not to ask employees how they are doing when facing hard times, especially when you expect everyone to respond negatively. 

Managers may believe that the general level of staff morale while downsizing is outside of their control. While it is limited, it’s not impossible to have a grasp on the situation. 

To monitor morale, you can look at things like staff turnover, how many quit after you announced the layoffs, and the reorganization of job tasks. Look at absences from work and performance indicators like feedback from customers or clients. 

If you're seeing a higher turnover rate and work performance is slipping, think about what you can do to boost employee morale during this downsizing period.

#7 Be Empathetic and Extend Support

One of the most important things a leader can do while you downsize is to be empathetic. Be genuine towards the employees who got let go and understand that the remaining team members will have a heavier workload. 

Encourage staff members to tell you how they're feeling and really listen. Allow them to vent their feelings without prejudice. Patience and understanding go a long way.

Offer to write letters of recommendation for newly laid-off workers that might be looking for work elsewhere during this time. Support former colleagues on social media sites like LinkedIn and make networking connections where appropriate. 

By positioning yourself as someone who supports their professional growth and development after being laid off not only helps with morale, but you won’t be burning any bridges in the process.

Maintain Morale with Help

I know that you may be facing difficult times, and you care about maintaining your employees' morale throughout the downsize. I also understand just how overwhelmed you may be. Decisions like these are never easy.

The downsizing process is one that needs to be handled correctly, and you're worried about the disruption it could cause. You don't want your employees to be overly stressed or feel anxious. 

Everyone at the company feels the downsize effects, but it doesn’t have to be as disrupting as it may seem. With these seven tips, you’ll keep morale higher through the downsizing process.

Considering your company may be in the middle of a downsize, I think it’s safe to assume you have some unresolved problems impacting core business processes negatively. Let us help you discover what’s keeping you stuck and holding your business back. 

Together we can work through the challenges you’re facing and identify solutions you’re confident will deliver the results you need.

When you sign up for our Get Unstuck & On-Target Workshop, you’ll learn how to better manage your business’s complexity and start putting what you learn into practice. 

We’ll help you identify your challenges and opportunities, prioritize the ones that will have the most impact, and narrow them down into the three most effective things for you to implement to see improvement. 

In a few short hours, you will narrow down hundreds of potential decisions into a single, executable plan. You'll walk away with a process you can use every time you need to narrow your choices and find the best way forward.

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