If your company is implementing layoffs, you’re understandably experiencing a difficult time.
Layoffs are tough for everyone involved. They not only bring up unpleasant emotions, but they can also degrade trust between employees and their company.
Why is trust impacted during layoffs?
When employees join a company, they have a “psychological contract”, or implicit expectations about their employment. For example, they may expect that they’ll get promoted if they take on managerial responsibilities. If their expectations go unmet — whether explicitly or implicitly — this is seen as a breach of their contract. Organizational downsizing is largely unexpected, and naturally seen as infringing on employees’ psychological contract(s).
In addition to being a difficult event, layoffs promote feelings of insecurity. This makes employees feel less safe, and they may wonder if they’re next “to go”. In times like these, it’s natural for employees to begin asking questions like: “Is my job safe?”, “Is this the right place for me?” and “Why am I here?” Because of the combination of instability and the absence of certainty, trust naturally begins to degrade.
Employees may second-guess the organization as a result. This is like a domino effect, where losing trust over one situation calls broader trust into question. For example, employees may start questioning the company’s values or mission.
As a leader, you play an imperative role in maintaining your employees’ trust during this time.
As a leader, how can I boost trust during layoffs?
Trust-building requires more attention at this time, so it’s imperative to clearly invest in it.
When people build trust, they’re looking for signs of ability, benevolence, and integrity in others (Mayer et al., 1995).
- Ability - signs of competence
- Benevolence - signs of genuine warmth and kindness
- Integrity - signs of morality; following through on commitments
As an employer, you’ll want to be striving for each of these things — especially during layoffs. Therefore, being transparent, accurate, honest, and clear will boost trust during this time.
Below are 6 steps you’ll want to take.
1. Be empathetic and open when you communicate about the layoffs.
Now is the time to really be there for your team. Acknowledge that this is a difficult time, and don’t try to sweep anything under the rug.
Here are some key points to anchor to:
- We’re dealing with a difficult time. Sadly, we’ve had to let some of our valuable people go.
- This is what we’re doing to make sure you feel supported; here are ways you can share your needs.
- The way we deal with this situation is a reflection of how we show up as an organization — this is what we stand for.
- These are the measures we’re taking to make this a smooth process.
Why it works
Communicating clearly helps people logically understand the reason for the layoffs.
This also gives you more control over the narrative, leaving less space for employees to create stories about why the layoffs are occurring.
2. Use facts, figures and logic.
Provide clear reasoning for why the layoffs are happening. Share statistics or evidence to explain the layoffs. For example, “Since COVID started, X of our branches closed, which resulted in X loss in profits.”
Why it works
This gives employees something to anchor to, and helps them understand the circumstances surrounding the layoffs. It also reduces the emotionality that can result, helping people “reason it out”.
3. Give employees a way to express their needs.
In tough times, employees need to express how they feel and how they want support. Give them a chance to do so. Consider introducing these initiatives.
For team leaders:
- Provide open office hours
- Have 1/1 check ins with team members
- Host an “Ask Me Anything” session to answer your employees’ questions
For HR representatives, or leaders collaborating with HR:
- Conduct focus groups and interviews (asking for employee voice, when paired with practical action, helps employees see your organization in a more positive light)
- Offer benefits, like counseling services
- Survey your workforce (ask what they enjoy about work and how to improve the environment further)
Why it works:
When employees are given a voice, their trust in their organization is heightened. Simply asking for your peoples’ opinion goes a long way. If they feel they’ve been heard, it also increases their level of loyalty and commitment to your organization.
4. Outline the steps you’re taking to address the situation.
Outline the steps you’re taking to address the layoffs and support your employees. Share written communications and clear plans to boost trust. This can look like:
- Hosting a company-wide videoconference (or “town hall”) to share the news and address questions
- Sending out written communications about the layoffs — include what’s being done to support your people
- Providing resources - like HR support
Why it works
This helps employees understand the situation from multiple angles, and gives them a future plan to anchor to.
Layoffs are just another form of change management. Communicating the change in multiple ways helps your people understand what’s going on and what to expect. This boosts certainty and enhances trust. Be sure to keep your communications clear and streamlined!
5. Anchor to your company’s mission, vision, and values.
Unite your people by anchoring back to your company’s mission, vision and values. These are the things that make your organization a great place to work.
Why it works:
One of the key elements of trust is benevolence. Anchoring to your company’s tenants casts your organization in a more positive light. Giving a sense of meaning and purpose reminds employees why they joined your company, and why they should choose to stay.
6. Follow through on commitments.
Most importantly, make sure to follow through on all plans, commitments and promises. For example, if you say you’ll host 1/1s with your team members, make sure to follow through and schedule them immediately.
Why it works
In times of uncertainty, you must create certainty to gain trust. So be clear about what you’re committing to, and follow up promptly.
Conclusion
In this article, we address how to build (and keep) trust with your employees during layoffs. At the end of the day, managing difficult times like layoffs gives an opportunity to demonstrate the strength of your organization and its people.
Start by showing signs of ability, benevolence, and integrity. Be sure to:
- Be empathetic and open when you communicate about the layoffs.
- Use facts, figures and logic.
- Give employees a way to express their needs.
- Outline the steps you’re taking to address the situation.
- Anchor to your company’s mission, vision, and values.
- Follow through on commitments.
Following these steps can help you maintain trust during layoffs.
References:
Datta, D.K., Guthrie, J.P., Basuil, D., & Pandey, A. (2010). Causes and Effects of Employee Downsizing: A Review and Synthesis. Journal of Management, 36(1), 281-348. https://journals.sagepub.com/doi/10.1177/0149206309346735
Davis, J.H., Mayer, R.C., & Schoorman, F.D. (1995). An Integrative Model of Organizational Trust. The Academy of Management Review, 20(3), 709-734. https://www.teamwork.no/pdf/organizational-trust.pdf
Rousseau, D. (1989). Psychological and Implied Contracts in Organisations. Employee Responsibilities and Rights Journal, 2(2), 121-139. https://www.researchgate.net/publication/226857215_Psychological_and_Implied_Contracts_in_Organisations
