Posted on July 13, 2015 in: Articles


Writing in TIME magazine (Feb. 16, 2009), Nancy Gibbs looks at some interesting data to discuss the hidden costs of layoffs and the importance of keeping your best people especially close to you when there’s no option to “downsizing.”

At a time when “75,000 jobs turn to powder in a day,” work environments fill up with uncertainty and people undergo an intriguing psychological change. Gibbs explains: “As all our emotions are rewired, we are grateful for what we once just assumed and frightened of things once ignored.” At the same time, “when people are frightened about losing their job, loyalty, productivity and morale all plunge.”

In such environments, the hidden cost of laying-off any people — even marginal producers — is that the people who are kept start looking for other opportunities. One survey found that in places where as few as one percent of the workforce was laid off, there was a 31 percent increase in turnover.

What organization can afford to lose nearly a third of its talent — especially when the loss is likely to come from the most talented part of the workforce? That’s true because, as Gibbs notes, “Top performers always have options.” And just to be clear, the survey also noted that as the percentage of layoffs rose, the much higher percentage of turnovers also climbed.

Economist Sylvia Hewlett told Gibbs that “women are twice as likely as men to voluntarily walk away” to find what they perceive to be a “safer haven.”

The good news is that high turnover isn’t inevitable even if layoffs are. Good leaders working for good organizations take steps to assure the people who stick around — and especially the best performers — that they are appreciated.

One caveat: These assurances don’t have to be expensive, but words alone can ring hollow — especially when trust has taken a huge hit. Look for ways to be creative and leverage relatively small costs into large considerations. Focus as much as possible on team members’ concerns and needs. And most especially carve out time to spend time with them, listening to their concerns and making it clear that you do care about them no matter what the circumstances.

Copyright © 2009 Yeshua Catholic International Leadership Institute, 208 E. North St., Durand, IL 61024. Any part of this newsletter may be reproduced so long as there is full attribution, our web site is listed, and any electronic reproduction includes a link to our site:

Bookmark and Share