How redundancies affect culture

There are ways of preventing 'survivor syndrome' derailing your recovery.

by Stephen Jones
Last Updated: 31 Jul 2020

It’s over. After a tough month, many of your colleagues have sadly gone as you’ve restructured, but the future of the organisation and its remaining employees has been secured. Now it’s time to put it behind you and deliver on the new strategy.

Or is it? 

With any redundancy, the company you led into the process is not going to be the same as the one you come out with, and often in ways you didn’t expect.

"Undergoing a period of significant change can be like having the rug pulled from beneath your feet," says Adrian Wakeling, senior policy adviser at ACAS. 

Although it depends very much firm to firm, research shows that a redundancy or major change programme can have a profound impact on the employees that remain, with many suffering decreased levels of motivation, and higher levels of anger and stress. 

This manifestation of guilt (at the loss of their colleagues), anxiety and insecurity has been termed by some as ‘survivor syndrome’.

In the short term it can lead to a dip in morale and productivity. US research company Leadership IQ polled 4,172 workers from over 300 companies which had made redundancies six months previously, and 74 per cent said their own productivity had declined. Nearly 80 per cent noticed more errors and mistakes being made (though employees were less likely to report a decline in quality) and believed that customers received a poorer service as a result. 

The longer-term consequences - if left unchecked - could see companies left with a whole cohort of people who just don’t want to be there, says Rob Briner, professor of organisational psychology at Queen Mary University, which could ultimately affect the company’s ability to deliver on its change strategy or bounce back.  

The impact on those tasked with delivering the news - the envoys - can be particularly harrowing, says Wakeling. Often managers or members of the HR team are left to have difficult conversations, with no additional support. 

A pilot study by CIPD researcher Madeleine Petzer looked into the psychological impacts of redundancies on the redundancy envoys. They’re likely to suffer from feelings of guilt, anger, frustration, sadness, lower levels of productivity and a general detachment from the company and their work. In fact it can be critical to the final delivery of the organisation’s overall goals because they are usually the same people tasked with implementing the strategy. 

“You've got to watch your survivors,” says Rosalind Searle, chair of HRM and organisational psychology at the University of Glasgow’s Adam Smith Institute. “If they feel that they've been run into the ground and handled unfairly they won't be on board with a potential recovery period and they won't share their ideas.”

The problem is this is often the group most likely to be left out during the redundancy process. 

What can you do?

The same principles apply as to any other crisis, says Wakeling - communication is the key to maintaining culture. 

It needs to extend further than the vague and chirpy ‘send all’ email from the executive team - it needs to be regular and to outline clearly the rationale behind the changes and the plan for the future. 

Giving employees the autonomy and chance to communicate their ideas or potential concerns is also important, says Wakeling. A good way of doing this is to keep the consulting groups established to represent employees during the consultation period post-redundancy. 

Your aim throughout the redundancy process and beyond should be to avoid cynicism, says Searle. Then leaders must recognise their role as ‘guardian’ and have frank and honest conversations with their colleagues. 

Mental health first-aiders and wellbeing support is important - but organisations need to show it. "If you try and sugar coat things or treat people as though they're a child in this situation it can be really disingenuous,” adds Searle.

Leadership IQ’s aforementioned study also showed that the effects on motivation and productivity were minimised among staffers who scored their managers highly for approachability, candour and visibility.

Context really is key

The idea that there is always going to be a 'syndrome' affecting all staff members is unhelpful, says Briner. There could be a whole range of consequences following a redundancy. 

In some cases redundancies may be well received among survivors if they believe it’s in the best interests of the company - it may even boost performance and morale because retained staff feel valued and important. It all ultimately depends on the organisation's individual journey. 

It’s when it’s perceived as unfair that the consequences are more likely to be negative. Either way, employers and HR managers should think about their individual companies and employee journey when considering how their culture might be affected. 

The complex backdrop of the coronavirus pandemic presents an additional challenge, says Wakeling. With many staff furloughed, or working from home, a company’s culture may already have become more fragmented. 

Coupled with the heightened levels of stress and anxiety - and the impersonal dimension of the video calls to which many companies have had to resort when giving bad news - this means managers need to take extra care to support all their staff during and after the process.  

Image credit: Frederic Cirou/PhotoAlto via Getty Images

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