Downsizing, whether through early retirement incentives, voluntary termination, or redundancies, is a complex and challenging process for leaders and HR professionals, and the ripple effects can be just as hard to manage.

Existing workers can feel like they are on thin ice; either the company is going bankrupt or they will be the victims of a subsequent round of terminations. Unhealthy competitiveness can affect team-building and destroy trust. What’s the best way to handle the post-downsizing period and rally demotivated troops?

This article explains how to motivate remaining workers when layoffs have occurred. It explains what a workforce may be experiencing and why. The article addresses how to communicate bad news to workers and motivational methods to engage them. Lastly, this article gives practical suggestions to re-engage and reskill existing workers.

Justify the Layoffs

Justifying layoffs does not mean making excuses; it means laying out the facts that led to the decision. The leaders of an organization that has downsized face resistance from a now distrustful workforce. No doubt, they will be asked to assume additional work at a time when they cannot be compensated for doing so.

At such times, it’s crucial that the messaging from leaders be clear, positive, and not demotivating. Any and all questions need to be answered to eliminate the spread of misinformation that can exacerbate friction and resistance. The way to do that is to lead with transparency.

Leaders should be honest about the financial situation of the company. They can provide facts and figures that show that the leadership group had no choice but to downsize. The goal here is to show that, although tragic, the leader made the right decisions. This can regain trust between leaders and the remaining employees.

Related: “How Leaders and Managers Can Leverage HR”

Layout the Vision and a Plan

The biggest hurdle for any organization is re-establishing lost trust between leaders and employees, and this is, even more, the case during times of strain. If layoffs are handled well, and leaders are honest and communicative, trust is maintained. But if layoffs are handled poorly without much explanation or communication, trust will be destroyed.

Presumably, the layoffs were part of a strategy to save the company and improve things. So, the best way to lead at this point is to tell the truth and layout a plan going forward. The company’s new vision should include achievable short-term and long-term goals.

Find the Positives

Paint the big picture. Does the company hope to reduce its outgoings as a result of the layoffs? Does the company plan to narrow its scope, cease activities in some areas, and focus on its core strengths? Find the positives in the company’s new strategy so that employees understand the rationale and the goals moving forward. If employees can grasp the vision, they are more likely to find a way to achieve it through good work.

The leaders should explain the situation exactly so that expectations are managed. There may be a temptation to paint a rosier picture to improve retention and stop employees from abandoning a sinking ship. But at this point, morale is low, and it’s better to come clean and not risk losing more trust by sugar-coating things.

Bad news is easier to swallow if there is a plan going forward. So, any bad news can be tempered with hope for the future. Rally the troops by telling them how much their contribution can make a difference.

Try a Kaizen Strategy

Things may seem out of control for employees, so now is the time to give them some control. If employees can gain a sense of empowerment and feel that they matter, they will have a reason to try.

Kaizen is a Japanese term meaning "change for the better" or "continuous improvement." It is also a strategy that many companies use for problem-solving and to improve its operations. Kaizen begins by involving all employees in a process of feedback and action. For example, employees may be asked to make suggestions regarding how to make their jobs easier and more rewarding. Leaders then find ways to incorporate those suggestions.

Other strategies that a company can use to empower employees is to focus on the strengths of the company and its employees and a plan to leverage them. Some of the workforce may need to be reskilled and investments made in new equipment. Tell the employees how the company intends to improve their job satisfaction and help them to do more quality work with less.

Here are some initiatives to empower, support, and motivate employees.

• Develop a plan to reskill employees

• Try cross-departmental training for team members

• Institute a mentoring program

• Update technology

• Create webinars to keep staff informed of new company innovations

• Offer a staff wellness program for physical and mental health

• Offer remote work or hybrid options

• Offer consultations with human resources or career professionals to avoid burnout

Showing complete support for the well-being of the workforce, helping them develop new skills, and providing new tools will help eliminate their fears and boost employee engagement.

Support Every Employee

An inspirational speech in front of employees is meaningless if there is no follow-through on the promises.

Now is the time for an open and supportive management style. The company culture should drive employee motivation and common goals. Every manager should meet with each of their direct reports and repeat the messaging.

Managers can avoid micromanaging by asking the employee for feedback and suggestions for improvements in the work environment. Managers could reward them for any that are adopted. As much as possible, employees’ needs should be met in terms of work-life balance and the potential for burnout from increased employee productivity demands.  

Departmental meetings should focus on sharing the workload and helping coworkers. Again, managers should ask employees what tools they need to do their best work and provide them.

There should also be a plan for the redistribution of work. This might require rewriting job descriptions and reassessing compensation when the company is in a better place financially.

For better communication with employees, read “Why Leaders Should Respond Instead of React When Things Don’t Go as Planned”

Incentivize the Workforce

While it’s not wise to make promises regarding future compensation, rewriting job descriptions is the fair thing to do if work is being redistributed and staff are taking on more responsibility. The company may not be in a position to recompense employee performance fittingly after a downsizing, but it should recognize when a staff member assumes hard work in a different role. This can help them to find another job should they choose to do so.

If possible, an incentives program will help to engage staff and ensure their willingness to provide feedback and suggestions for improvements. For example, they might win perks like a gift card or a day off for an adopted idea. Perhaps have staff members vote on employee recognition to ensure fairness and transparency with incentives too.  

For better leadership, read, “Powerful Reflection Questions for Leaders”

Leading In Tough Times

Leading people through tough times means supporting them. But a good manager can’t provide support if they are not present and visible. Now is the time to have an open-door policy so that staff can seek answers to their concerns.

A willingness among the higher levels to respond to and support workers will build trust, which is crucial at times of layoffs and financial instability. A workforce that believes its leaders are working in their best interests will turn into a loyal workforce, particularly if they begin to see evidence that leaders’ decision-making is paying off.