Combating Layoff Anxiety In Your Workplace

You don't need us to tell you that the employment landscape has seen extraordinary changes in the past few years. And unfortunately, not all those changes have been for the better.  Last year alone, over 5,487 companies announced mass layoffs. So, it should be no surprise that employees everywhere are more anxious about their job security than ever before.

Even though layoffs seem to have become a common occurrence, the fear of losing one's job can quickly have a negative impact on the entire workforce. It may lead to poor employee morale, loss of productivity, and mental and physical health issues. According to a survey conducted by The Harris Poll on behalf of Justworks, 25% of employed adults are worried about being laid off in 2024.

As a manager or business owner, combating layoff anxiety in your workplace is crucial to maintaining positive and motivated work conditions and optimizing productivity. In this article, we will discuss the reasons behind layoff anxiety, its effects on employees, and strategies to combat it in your workplace.

Understanding Layoff Anxiety

Layoff anxiety is the fear of losing one's job due to cost-cutting, downsizing, restructuring, etc. The worry can be triggered by previous experiences with job loss, a general sense of job insecurity or when a company is sold or merged with another, or by rumors of layoffs.

There is no doubt that the anticipation of becoming unemployed can affect employees at all levels of the organization, from entry-level workers to top executives. 

Causes of Layoff Anxiety

Several factors can contribute to layoff stress in the workplace. These include:

• Economic downturns: During economic uncertainty such as a recession, companies may be forced to downsize or restructure, leading to job loss and increased employee stress.

• Previous experiences with job loss: Over 1.64 million people were laid off in the United States in 2023. Employees who have experienced job loss in the past often have a heightened fear of being let go again.

• Rumors: When a company is doing poorly, reporting lower than expected earnings, or bought (or sold), rumors can spread quickly and create a sense of panic. 

• Job insecurity: Employees who believe their performance is not valued can experience layoff anxiety. In fact, a published report found that 77% of employees said they don't feel strongly valued for their work. 

Consequences of Layoff Anxiety

Fear of being let go can have a significant impact on the workplace as a whole. Some of the most serious effects of "job place jitters" on your organization are:

• Decreased productivity: Employees anxious about losing their position and source of financial support may have difficulty focusing on their work, leading to reduced productivity.

• Low morale: Layoff anxiety can create a sense of uncertainty and dread in the workplace, leading to low morale among employees.

• Increased turnover: Employees who are fearful about losing their jobs may start looking for other employment opportunities, resulting in increased turnover.

• Negative impact on wellness: After the last few years, every organization is more aware of how emotional health can affect performance. Layoff anxiety can cause stress, depression, low energy, sleep issues, and other physical and mental health issues in employees, affecting the individual and those around them.

Strategies to Combat Layoff Anxiety

Layoffs can become a massive hit to employee engagement and morale. As a leader, addressing and combating layoff anxiety in your workplace is vital. Here are some strategies to help alleviate layoff anxiety among your employees.

Open and Transparent Communication

One of the best ways to minimize layoff anxiety is through head-on, open, and transparent communication. Fear of the unknown is often more harmful than the truth. Often, layoffs are announced to employees without insight into how the decision was made. Even if you may not be able to get into specifics, it’s important to let employees understand why the layoff was necessary. Take responsibility and outline what is being done to prevent job losses in the future. 

Showing empathy in your communications is critical, both to those who have been laid off as well as the employees who remain. Be honest with your employees about the state of the company and any potential changes that may occur. Employees might display higher levels of worry when there is speculation about layoffs versus when their organization has issued official communication about actual cuts. It is critical to communicate with your team to create a sense of trust and transparency in the workplace.

Provide Job Security

As a business leader or business owner, providing reassurance to your employees is important. This can be done by setting clear expectations, providing regular performance feedback, and recognizing and rewarding employees for their hard work.

Offer Support and Resources

Obsessing about being let go takes a toll on employees' mental and physical health. Up to 47% of employees do not believe they are prepared for a potential job loss. As an employer, it is important to offer assistance and resources to help employees cope. This can include providing access to counseling services, offering flexible work arrangements, and promoting a healthy work-life balance.

Encourage Employee Development

Employees who feel their skills and contributions are valued are less likely to experience layoff anxiety. Acknowledging employees' contributions makes a difference for your company in retaining workers and providing job satisfaction.  

Encourage employee development by providing training, learning, and career advancement opportunities. Promoting growth will not only help to alleviate layoff anxiety but also improve employee engagement and retention.

Foster a Positive Work Environment

A positive work environment can go a long way in combating the distress of sudden job loss. As a manager or business owner, fostering a workplace culture that promotes open communication, collaboration, and support is essential. This will help to develop a sense of community and belonging among employees, reducing their anxiety and improving overall morale.

Responsibility for Combating Layoff Anxiety

While it is ultimately the employer's responsibility to handle workplace anxiety, don't overlook the contributions your current workforce can make in various ways. It is beneficial for all employees to work together to create a positive and supportive environment. This includes managers, HR professionals, and employees at all levels of the organization.

In today's uncertain economic climate, layoff anxiety is a common occurrence. This stress can negatively impact your workers, whether your employees are on-site or remote. That's one reason it is more important than ever to be proactive.

As a leader, it is important to be proactive. Address and combat tension among your staff to maintain a positive and productive work atmosphere. By implementing strategies such as open communication, providing job security, and fostering a positive work environment, you can help alleviate layoff anxiety and create a more engaged and motivated workforce.

Let Justworks Guide You

If you have concerns about how layoff fears affect your company, Justworks can help. Justworks helps with transitions for both your organization and your employees such as certain employment-related compliance, affordable employee benefits and payroll automation.