Prevent ‘Survivor syndrome’: Avoid turnover after layoffs

Issue: After a round of layoffs, remaining employees will wonder "Who’s next?"

Risk: That insecurity can cause layoff survivors to "fire themselves" and seek greener pastures elsewhere.

Action: Don’t ignore that uncertainty. Use open communication and education to keep star performers on board.

Layoffs put retention on shaky ground at precisely the time that remaining employees’ loyalty is key to your organization’s success.

Ignoring that "survivor syndrome" will only cripple morale further and generate more turnover. Communication is the key to overcoming it. Here’s how:

1. Communicate with employees openly and often. HR and senior management must be honest and proactive with employees about the organization’s financial health and its business plans. Say to top performers point blank: "You’re a key piece of our future. What concerns do you have and how can we address them?"

The more official communication from you and management, the less reliance on rumors. Help focus employees on a vision and direction that’s consistent and familiar.

2. Ask employees for cost-saving ideas. That not only shows your distaste for layoffs, it can generate some great ideas.

Example: When a San Francisco tech company asked for cost-cutting ideas, employees suggested voluntary shorter workweeks and unpaid vacation.

Result: Enough employees signed on to four-day workweeks and unpaid vacations to cut the company’s labor costs by 40 percent.

3. Strive to maintain the current culture. Cultural change can be the biggest fear surrounding restructurings. Try to retain the low-cost/high-impact touches in your workplace, from quality coffee to company picnics.

4. Stress the value of your benefits plan. Research shows that layoff survivors tend to view their benefits package less highly. Nip that attitude in the bud by distributing a personalized benefits statement to each employee.

5. Focus on individual achievement and development. Now’s the time to crank up your recognition efforts. Tie rewards and bonuses to individual goals. Keep internal job postings fresh and look for opportunities to cross train and promote from within.

How one big company handled a mass layoff

When AOL in October 2007 laid off 2,000 workers worldwide, HR and the C-Suite had to pay attention to how employees got the news. Here’s CEO Randy Falco’s all-staff letter explaining the layoffs, followed by some of the details on how severance packages were structured.