Businesses need to effectively deal with those who remain

Editor’s note: Michelle Stockman works with Little Rock-based Arkansas Capital Corp. to promote entrepreneurship development around the state. Stockman earned a bachelor’s degree from Loyola University-Chicago in communications and fine arts, and earned a master’s in entrepreneurship from Western Carolina University. Her thoughts on business success appear each week on The City Wire.

2009 has been a banner year for bad news at every corner as the economy has grabbed our attention time and again through the roller coaster ride businesses small and large have rode throughout the months. With repeated statistics that emphasis the 9.7% national unemployment rate and a possible 16% unadjusted unemployment rate to the average job search reaching upwards to 12 months, we know the economic nuclear winter has been a long road.

For those running a company or managing a department, another problem has been found in times of downsizing and employee layoffs. The Center for Creative Leadership’s David Noer has studied a trend in companies that need to downsize their employees. Noer coined the term “layoff survivor sickness” as a “fierce and far-reaching impact on managers and employees who remain in organizations after downsizing.” In other words, those who remain in a company are left with disheartened emotions, lack of trust and pressure to “carry on.”

Noer is quoted for saying “too often organizations institute layoffs to cut costs and promote competitiveness, but afterwards, they find themselves worse off than before. All they have to show for it is a depressed, anxious and angry workforce that is confused, fearful and unable to shake an unhealthy and unreciprocated organizational dependency.”

The downside of “layoff survivor sickness” is a workforce that is afraid to be creative or innovative, a company that is afraid of risk and a workforce that is paralyzed in its ability to adjust to meet the economic and business challenges the organization faces. In this time where organizational layoffs are becoming an accepted business norm, business leaders need to prepare their tool kit in addressing the needs of the remaining employees.

Like a business preparing to survive a harsh economic time, business leaders and managers should prepare ways to address organizational changes, co-worker grieving, refine employee commitments and strive for excellent employee communications.

With the average lifespan of a job lasting a mere 18 months in our current times, change is inevitable. Whether through letting employees go or losing employees to the next opportunity, preparing the workplace to address and accept such changes are needed now more then ever in business.

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Stockman can be reached at [email protected]