So, what does downsizing do to individual employees and the working environment?

Even though many people today are used to working during changing and more uncertain conditions, losing one’s job can still be a momentous event.  How we react naturally depends on our personality, age, background, and profession, but we still see that many go through the same emotional process:  from surprise to shock, denial, resentment, and finally acceptance and seeing new possibilities.  Further, we see that employees who have lost their jobs are also often worried about losing their next job due to reorganization, relocation, or shut down’s.  During these processes, it is crucial that the organisation has a good offer for those who have to leave the company, demonstrating social responsibility to their employees by adapting conditions of employment to allow for a dignified conclusion of employment.  The Ministry of Government Administration and Reform writes on their website, “individual career planning is extra helpful for supporting employees in organisations involved in fusion, relocation, or downsizing processes.” In these situations, career development programs contribute to making employees feel confident in their own competence and ability to market themselves in the job market.  It is also important to treat those who continue their employment with dignity and respect.
 
It is important to understand that downsizing also has an impact on employees still on the job after a downsizing process.  Many companies see only benefits and profits too soon, and forget about those remaining after a downsizing process.  Because downsizing doesn’t just affect those who have to leave the company.  Often those who stay are just as affected.  Clinically, this is referred to as “lay-off survivor syndrome”.

Research shows that downsizing presents a health risk for those who continue their employment.  The Finnish Institute of Occupational Health, found that the risk of dying of cardiovascular disease increases significantly the first two years after downsizing.  At the same time, long-term sick leave increases markedly, especially for employees over 45.  Further, we see that those remaining after a downsizing process often ask themselves how necessary and fair the process really was, and often doubt whether it will actually lead to a more secure future.  Many also experience that downsizing processes contribute to an increased work load, since the amount of work is not reduced, even though there are fewer employees.  At the same time, some also experience “falling down the job ladder” where they have to do jobs below their level of competence.  Some express feelings of guilt:  why did my colleague have to go while I got to stay?  In other words, it is extremely important that employers have a clear personnel policy, also when it comes to those remaining with the company after a downsizing process.

Downsizing will, in many organizations, also influence the working environment.  Uncertainty, and job insecurity can trigger stress and angst for may employees, which again can lead to more reticent and reserved employees.  Many ask themselves, wonderingly, what job security, and the relationship between effort and reward, really are.  Those still with the company can inherit uncertainty related to the future:  when this happens again, who will be affected then?  Turing this around can take time if employers don’t have a conscious and clear strategy for these conditions.

During downsizing processes, good and essential information is often undervalued.  In a period marked by uncertainty and rumours of change, employees will experience an even stronger need for information.  Information during these periods can help to reduce stress, and achieve understanding and acceptance, while also providing meaning.  For organizations in downsizing processes, information and planning should go hand in hand with implementation, focusing both on those who have to leave, and those who stay with the company.

Right Management is Norway’s leading consultant company for career changes.  In addition, Right is a strategic sparring partner for organizations during reorganisation processes, as well as during the implementation of various initiatives.  At any given time at any given time, Right has over 100 candidates for various carrier change programs.

Article by: Anne Lene Andersen Watn.
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