The Cultural Impact of a “Right-Sized” Generation

By Erin Bellotte

Over 305,000 people were impacted by an organization’s decision to “right-size” in 2023 according to Forbes¹. In writing this article, I reflect on my time in a leadership position for an oil and gas company where I was required to decide which employees would be retained and which employees would go home without a secure paycheck in their foreseeable future. Layoffs are often exacerbated by situations outside of the organization’s control; the economic wake of COVID-19 is the most prevalent example of how quickly industry and the world can shut down overnight.

From a strictly financial perspective, maintaining a right-sized workforce is crucial for business success.  Labor costs take a significant portion of the budget, but what is the unforeseen long-term cost of mass layoffs to employee engagement and retention?

A shift has occurred between the Boomers and the younger generations about the employers’ loyalty to the employee. While previous workers could count on working hard and being rewarded with pensions and job security, the younger generations have seen the impact of mass layoffs occurring often since the early 2000s, starting with the Great Recession. I would argue with each passing headline stating another mass layoff by a major corporation, the younger generations are seeing that they are purely a number to their employer, and there will be a time when their number is up – no matter the overtime worked, holidays missed, and lost family/social time. The current feeling is that all employees are replaceable.

The MIT Sloan article Preserving Employee Morale During Downsizing painted the picture perfectly when they state:  “A Right Associates survey found that only 31 percent of survivors agreed that they still trusted their organizations after downsizing.  Survivors reduce their commitment if they perceive that the company’s downsizing process is unfair.  Several studies also have shown that survivors often exhibit resistance to change, fear, withdrawal and paralysis due to increased cynicism and burnout as their workload doubles or triples and their department size shrinks by one-half to two-thirds.”²

Furthermore, research shows that organizations with higher employee engagement see on average 18% increase in sales productivity, 23% increase in profitability and a 78% decrease in absenteeism. These statistics confirm that finding a solution to the negative effects of “right-sizing” is critical in moving organizations forward.

As a manager and leader of an organization, how do you counteract the sense of betrayal and apathy of the employee base?  What levers can you pull to bring the level of loyalty back into the building and fight off the Great Resignation and Quiet Quitting mentality?

A successful path forward will depend on your organization’s history of right-sizing; if an adjustment was needed due to the impact of unforeseen economic catastrophes, like Covid-19, the following suggestions will carry greater weight.  If your organization is prone to making adjustments in the workforce due to quarterly investor relations and short term attempts to bolster profit, the employee base will likely maintain their cynical view.

The most critical step is to develop your people managers to create meaningful and engaging relationships with their employees.   First they must be willing to have an open and honest conversation with each employee, finding out what matters most to each individual.   From there, the people manager should assist the employee with reaching their personal and professional goals – even if that means the employee moves on from the organization.  Once a plan is created for the employee’s future success, establishing clear and consistent expectations, feedback and check-ins on progress is critical to keep moving forward.  Lastly, recognizing the efforts and impact the employee is making to the organization through the avenues that are of the highest motivation to the employee shows how the organization values their work.

The Question Method expands on these principles and provides a clear framework for people managers that can create these meaningful and engaging relationships.  Learn more at www.thequestionmethod.com

¹Forbes: Over 305,000 Laid Off In Major U.S. Cuts This Year—Here Are The Biggest (forbes.com) by Brian Bushard, 12/20/2023
²MIT Sloan Management Review: Preserving Employee Morale during Downsizing (mit.edu), by Karen E. Mishra, Gretchen M. Spreitzer and Aneil K. Mishra, 1/15/1998