Layoffs are an unfortunate aspect of a business’s lifecycle.

Whether a company over-hired during a period of steep growth in anticipation of potentially continuing that growth.

Or a company had a client that represented a large percentage of their total revenue leave and is trying to figure out where to come up with the revenue to pay for everyone’s salaries.

Or a company has gradually fallen on harder times and has decided that restructuring how the organization looks and operates is critical to being successful in the future.

Or a company could have had an informal layoff where they decide to not backfill positions after someone leaves and just ask those who are left to take on additional work.

They are part of a business’s natural ebbs and flows. One could argue that if a company isn’t putting themselves at risk of having a layoff (e.g. hiring to pursue new opportunities), they aren’t effectively preparing themselves for opportunities for high growth when they present themselves.

But what happens to those who are left?

Those who are left oftentimes feel a sense of survivors guilt – as if they are the lucky ones for not getting fired.

This is oftentimes quickly followed by burnout because they are now being asked to do the work of multiple people after growing accustomed to doing the work they had been doing.

Once burnout occurs, people start to formulate their own assumptions about what is next for them and the business. This narrative people create about their future fate is oftentimes way worse than the reality of the situation because the news of the layoff in the first place was likely a huge surprise and has tarnished their belief in the business long-term.

As a leader of a company, here are 3 things you can do to help build back morale after a layoff:

1.      Control the narrative

If leaders don’t control the narrative after a layoff, their people will come up with their own narrative. One leader I interviewed 3 months after a layoff her team decided to pursue shared that she heard from one of her team members that the company was about to go through a merger or get acquired. She had no idea where that news came from. As the second largest shareholder in the company, she reassured her team member that a merger or acquisition was not going to happen, but she couldn’t help but wonder where this rumor came from and how many other rumors might be flying around that she has no idea about.

To minimize surprises around a layoff, some leaders will practice open book management or sharing the financials of a business with all of the employees.

The challenge with the assumption that employees who know the financials will be less surprised if a layoff happens is that the employees don’t know how an executive team will react to multiple down revenue months in a row. Multiple down revenue months could mean no bonuses this year or it could mean layoffs. Knowing how an executive team will react to multiple down months in a row is not the job of the employees.

Companies also often face the challenge of leadership happy talk. This is the act of a charismatic leader (oftentimes the founder or CEO) who say things like “we have been around for 25 years and aren’t going anywhere!”

This talk, when times are good, boosts morale and makes people feel secure. But when a layoff happens, it completely tarnishes morale and the trust employees have in the company moving forward is severely tarnished.

Therefore, if leaders are to control the narrative for those employees that are left, they need to explicitly share why their performance justified keeping them and how that helps the business grow into the future. Leaders essentially need to reassure employees why their job is safe or else employees will assume their job isn’t safe and starting looking for jobs elsewhere.

2.      Make people feel heard

There was a prison study in which inmates were to submit feedback on the state of the cafeteria food. This suggestion box had always existed in the cafeteria but the results of the dining experience never seemed to change. Leadership in the prison wanted to get Likert scale feedback on the quality of the dining experience in the prison and to little surprise, their scores were very low.

Eventually, a leader within the prison decided to do something different. He decided to read all of the suggestions out loud in front of all of the inmates. Regardless of how feasible the suggestion was, he read them all out loud in front of everyone.

Then, something interesting happened. The scores for the quality of the dining experience at the prison improved on the Likert scale. The prison didn’t in fact do anything to improve the dining experience for the inmates, but they let them know that they were heard. 

The same holds true for employees.

I am not advocating for gaslighting the employee experience (e.g. listening to what they have to say and doing absolutely nothing about it), but what I am writing is that helping employees feel heard, even if the leader can’t do anything about their concerns, is much better than ignoring employee concerns altogether to avoid the hard conversation. 

3.      Elaborate on the why to the nth degree and repeat, repeat, repeat

Too many leaders assume that all employees are privy to all the information that the leader is and should therefore understand why certain decisions were made.

Too many leaders assume that explaining why a decision was made once is sufficient for employees to fully digest and understand moving forward.

These are toxic assumptions because employees are not aware of the information a leader has at their disposal, and although the leader may have explained the situation once to the employee, the leader needs to go further to explain the why behind the decision.

For example, a leader could share “We have decided to layoff 5% of our workforce. We made this decision because we over-hired the year prior. We were on a major upward trajectory and wanted to be prepared if the market continued to climb. Unfortunately, that didn’t happen and we let go of these employees for the sole fact that we don’t have enough business to justify having them on the team moving forward. Moving forward, we believe we have right-sized our business to be commensurate with where the market is now. As long as we are able to achieve xyz profitability, we should be able to grow a steady growth rate moving forward. When our company is able to achieve xyz profitability, it allows us the freedom and ability to grow our business in a stable way. When we are below that profitability, it puts the business at risk of going under. If the business goes under, nobody has jobs and we won’t be able to work together anymore.”

This may seem like overkill, but by being abundantly clear about how the business operates and the numbers the business needs to achieve to thrive, it empowers employees to know where they stand with the business. 

Then repeat, repeat, and repeat some more. And when you feel like you have shared this message a million times, share it one more time just to be safe. 

Oftentimes, employees will need to hear a message multiple times for them to become conscientiously aware as to what the message means and the ramifications it has on them.

Overall, building back team morale after a layoff is hard. It is the companies that can control the narrative, make people feel heard, and explain the why with enough repetition that are able to achieve success after a layoff.