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Employee’s Well-Being Linked To Layoffs

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The Gallup organization has a remarkable track record in conducting global surveys and offer insights on how common factors impact employees in similar ways regardless of geography, ethnicity, culture, and other distinguishing characteristics. Gallup is also at the forefront of examining what used to be considered “soft” issues related to the human experience that have an impact on the more traditional “industrial” metrics like output, productivity, absenteeism and the like.

Recently released Gallup research points to a connection between an employee’s perceived sense of well-being (Gallup’s index measures the difference between whether employees feel they are “suffering” or “thriving”) and whether or not their employer is either hiring or laying off workers. I’m sure many of you will consider this obvious. Nevertheless, it is interesting to see what we consider to be an intuitive truth laid out in scientific detail.

The Details from Gallup

“Worldwide, workers who say their employer is currently letting workers go are less likely to be ‘thriving’ than those who say their employer is currently hiring, according to Gallup surveys conducted in more than 100 countries in 2008 and 2009. The global data reveal that workers who believe their companies are hiring new workers are 27 percentage points more likely to be thriving than suffering, nearly double the gap for workers at companies laying workers off (14 points). Those who say their company is not changing the size of its workforce fall about halfway in between, with a 20-point thriving gap.”

The Shifting Currents of Employee Mood

Okay, that makes sense. Employees are more likely to thrive when their employer is hiring. Gallup speculates, and we at Engagient would agree, that there is likely a connection between an employee’s perceived sense of job security and whether or not they are thriving. Job security is one of the more prevalent and obvious ways that an employee would assess their overall level of safety. When people don’t feel safe, for whatever reason, they have less productive “bandwidth” (working memory) to dedicate to the task they are working on.

Perhaps the most relevant point here is that you will never be able to get employees engaged in the workplace if a large part of their experience is a felt sense of risk around the security of their employment. It would make sense then, that’s the mood of employees — as an expression of their felt emotions — would decline if they felt at risk. In fact, Gallup found exactly that in their research. In addition to the findings indicating that employees are less likely to thrive if their employer is not hiring, Gallup also found a significant drop in mood of employees for the very same reasons. If an employee’s firm is hiring, there was a 39-point gap between employees reporting only “happiness and enjoyment” versus those reporting only “stress and worry.” That gap drops to 25 points for employees working in firms that are laying people off.

Gallup explains further, “Taken together, these findings suggest a pervasive effect of harsh economic realities (perceived ones, at least) on well-being all over the world. …the present findings suggest a direct connection between well-being and felt economic security. Thus, from the standpoint of well-being, the current economic crisis may have as much to do with worries about what will happen tomorrow as it does with economic problems today.”

BEST PRACTICE TIP — At Engagient we know proven ways to improve employee mood, regardless of the economic conditions. If a company is either laying off or has a hiring freeze, taking specific actions to reassure employees becomes critically important. We already know that simply having a job in an economic downturn is not reassuring to employees. We need to do more to provide employees with the conditions that they need to be truly engaged on the job. The impact on perceived job satisfaction, productivity, profitability, and the customer experience all hang in the balance.

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