Once Burned Employees Likelier to Job-Hop

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By Genevieve Douglas

Workers terminated in a layoff are more likely to quit future jobs, presenting implications for organizations hiring from a labor pool with a growing segment of workers who have experienced layoffs.And that’s not just the first job, according to new research from Cornell University’s School of Industrial & Labor Relations. Academics compared workers’ “quits” before and after a layoff, and found people who’d been laid off were 65 percent more likely to quit subsequent jobs.

Moreover, “it seems like the effect may persist” into the second, third and fourth jobs after the layoff, according to Paul Davis, who conducted the research and is an assistant professor of human resources studies at Cornell’s School of International Labor Relations.

Employees laid off from one company probably feel less committed to subsequent employers, and will jump from job to job because they’re paying more attention to the external job environment, Davis said. They’re more vigilant about job opportunities, he said.Davis studied the work histories of 2,500 people who were laid off to see what effect it may have had on their career trajectories. He spoke during an April 13 webcast hosted by the Cornell ILR School.

Lasting Effects on ‘Survivors’ Too

Layoffs continue to be a traumatic experience for both the people terminated and those who stay, with employees often adopting the terminology of “survivors and victims,” Davis said.

Those spared “are typically not better off for the experience,” he said. They can harbor ill will toward the organization if they thought colleagues were mistreated; they often worry that they may be next; and they may have to pick up the slack, leading to burnout, he added. In some instances, these employees may also decide to jump ship, Davis said, so employers should prepare for voluntary turnover to increase in the wake of a layoff.

“Thinking about the long-term solvency of the firm, the accomplishment of strategic objectives,” layoffs may not be the first strategy companies should pursue to cut costs, Davis noted.

How Does HR Help?

Human resources departments are driven to engage employees, but too much engagement can make the psychological fallout of a layoff worse, David Noer, consultant and author of “Healing the Wounds: Overcoming the Trauma of Layoffs and Revitalizing Downsized Organizations,” told Bloomberg BNA April 17.

HR wants workers to “put their whole sense of purpose and identity into the company,” but too much dedication can lead to devastation after a layoff, Noer said. HR should aim for a more balanced approach, and not have employees put all of their eggs “in the employment basket,” he added.

Noer also recommended that HR work with employees who remain after a layoff to address potential survivors’ guilt, anger and other emotions. The worst thing management can do is emphasize this difference between the “winners” and those who were laid off, Noer said. There’s no immunity in a layoff, and the sense of betrayal could be even bigger if there are additional cuts down the line, he said.

Davis said HR can also help communicate with employees during and after a layoff. It’s key for employers to be open and honest with “survivors” by explaining why the action was taken, why they were retained, what their place is in the organization, and why they will be critical to the future success of the organization, Davis said. “I think that’s what they need to hear,” he said.

To contact the reporter on this story: Genevieve Douglas in Washington at gdouglas@bna.com

To contact the editor responsible for this story: Tony Harris at tharris@bna.com

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