Much has been written about the impact of layoffs during the recession on the workers who have lost their jobs. Yet what of the surviving workers? What has been the impact on them? Recent research has shown that there is a significant impact on employee productivity and the subsequent financial performance of those organizations that have engaged in layoffs.
According to Leadership IQ, a leadership research and training company study of over 4,000 employees in 319 companies, 74% of employees who kept their job amidst the recession report that their own productivity has declined since the layoffs and 69% of those surveyed say that the quality of their company's product or service has declined. Other key findings were: 87% said that they are less likely to recommend their company as a good place to work; 81% said that customer service has declined.
Mark Murphy, Chairman of Leadership IQ calls the phenomena "layoff survival stress," adding that "there is a myth that surviving employees will be so grateful that they still have a job that the will worker harder and be more productive. But as this study shows, the opposite is usually true."
David Sirota, Founder and Chairman of Sirota Survey Intelligence, argues in his book, The Enthusiastic Employee: How Companies Profit By Giving Workers What They Want, that it is a management fallacy that keeping people nervous about their jobs induce them to perform at high levels. To the contrary, great stress causes employees to focus on their own tenuous situations rather than on getting their jobs done and done well. Sirota says that layoffs generate a sense among surviving workers that they are disposable commodities and that in turn results in a disengagement from the company and its objectives.