With staff reductions dominating the HR space in the business press these days, it is easy to experience numbness to all the news. With large industry leaders laying off 5,000, 10,000, even 20,000, and more employees at a time, it is just as easy to lose lock on the volume of people impacted. Forbes layoff tracker identified over 70 companies that reported reductions in force from January through March of this year. Layoffstracker reports that 59,243 employees were laid off from 90 companies in March alone, with a total of 473,786 released from January 2022 through March 2023. Onboarding newly hired layoff victims is and will be commonplace.

The layoffs appear to be driven by over-hiring during the COVID pandemic combined with elevating interest rates and inflationary concerns mixed with drops in consumer spending. It’s a potent recipe for corporate pullbacks.    

Given the government-reported strength of the job market along with “The Great Resignation” seemingly in full force, the impact of layoffs on workers can be wildly confusing. Under normal circumstances losing one’s job is often traumatic, but it seems somehow worse today in the face of higher consumer costs, heavy losses in 401K and other investment accounts over the course of the past year, and escalating costs of borrowing, etc. The trauma is real, and the impact on both current and future employees is significant. 

The advice here is to keep the impact and possible reactions to being laid off front of mind when onboarding newly hired layoff employees.

The impact of layoffs on employees

For anyone who has experienced a layoff, it can be at minimum, tough to process and justify to oneself. Depending on how it is presented to the impacted employee, it can range from an “it us, not you” type of explanation, to one that is centered on the value of the individual as a performer or skills holder relative to others (who were retained). Given that mass layoffs tend to be conducted in as standardized a fashion as possible, with managers' reasons and responses to questions all pre-scripted, it tends to be the former.   

Either way, the impact typically lands on one of several benefits of employment:

• Loss of future income (beyond severance payments)

• Loss of health/well-being, retirement, related benefits (for the employee and their family)

• Loss of membership or association (in the company, social circle)

• Loss of status (as a <insert job title here>)

• Loss of self-esteem (as a valued and contributing member of an organization) 

• Loss of a sense of security (that their efforts will be rewarded and protected)

Such impacts are more accessible and easier to understand. But it is the hidden costs of these losses that make this a difficult experience to manage for many. Sucher and Westner report that the impact on employees is substantial (as is the impact on corporate performance). They cite studies that document the psychological, physical, and financial tolls that are associated with being laid off. For example, it is the seventh most stressful life event (more than divorce), and can take over two years from which to recover psychologically.

Laid-off employees are twice (2X) as likely to experience depression, have four (4X) times the risk of substance abuse, and six (6X) times the likelihood of committing acts of violence. The odds of developing stress-related illnesses such as hypertension and heart disease increase by 83% in the 1-2 years after a layoff, and the risk of suicide rises by 1.3 to 3 times normal. And the fears of financial loss are real as well – it has been reported that impacted employees may experience as much as a 20-30% decline in earnings, when the cumulative effects of unemployment, underemployment, and an inability to find equivalent replacement jobs haunting them for years. 

The hidden impacts on those who are hired

Employers should be aware that it is not only the aforementioned factors that cause concern. The loss of work is indeed trauma-inducing and can have longer-term impacts on the way they look at or approach their new company and duties. Once they have found suitable reemployment, for many newly hired layoff employees the issue that they face is overcoming a loss of trust. With the unwritten compact between a company and its employees, they are expected to trust their leaders and the organization as a whole – trust that in exchange for their efforts, results and loyalty they will be reliably compensated, respectfully treated, fairly evaluated and developed.  

From experience with many reductions in force and terminations, the negatives that hit the new company with newly hired layoff victims include not only a loss of faith in corporate life, but can also translate into risk aversion, a hesitancy to speak up or constructively criticize, a tendency to overwork to prove oneself anew and gain supporters, and a continuing evaluation (if not active consideration) of other opportunities. The issue is that research shows that once betrayed, such trust or faith in those elements of the relationship with the new company can be hard to recover. It is those elements that the new company must deal with when considering newly hired layoff talent.

The positive impact of hiring laid-off employees

Not all is doom and gloom – whether the impacts are as dire as the research suggests, the majority of such individuals act in an appreciative manner once they have landed new roles and become positive contributors and influences in their new organizations.  New jobs tend to translate into expanded skills and capabilities, a willingness to learn and self-develop, a desire to adopt the values and beliefs of the new organization in which they seek to fit, and an eagerness (and ability) to contribute to the success in new and unique ways based upon experiences at other companies.    

The keys are to leverage these as an opportunity to take advantage of the enthusiasm, excitement, and experiences that the new employee offers to bring insights into:

• Approaches and methods from other companies (often related industries or competitors) and associated learning from the new employees as part of a continuous improvement philosophy.   

• New technologies and applications being successfully implemented elsewhere.

• Key performers from other companies who might be recruited due to the layoffs creating uncertainty at the previous employer.

• Markets, products, and service offerings that are emerging in the same or related industry.

• Philosophies or leadership approaches that are bearing fruit in otherwise difficult or challenged industries or markets.

This is not to suggest that new employees are to be hounded into revealing trade secrets or methods; rather, their combined experiences from all employers should be leveraged to bring fresh and productive ideas into consideration for adaptation into the new employer’s operations.  

What can be done to overcome the apparent trauma

Given the challenges that come with hiring previously laid-off employees (including the one-to-two-year “recovery” timeframe previously mentioned), the objectives of onboarding should be defined and articulated, with a disciplined program/process to enable their integration into the new company, business unit or function, and department. 

Examples of onboarding objectives for such new hires might include: 

• Re-building trust with the corporate environment
• Reestablishing self-confidence in one’s knowledge, skill, and abilities
• Reestablishing financial security 
• Creating an early connection and sense of belonging/commitment to the new organization 
• Reinforcing your/their decision to work for the company
  
  

Managerial actions on an individual level

The key starting point is to train managers to provide regular coaching and consistent reassurance during those critical first months/years as they transition into the organization. The goal is a “soft landing”, where new employees are made to feel welcomed, capable, and their basic employment needs taken care of. They should receive training and development on how to successfully integrate new employees into the environment and how to look for signs of previous stress and trauma so that they can refer anyone in need to an employee assistance program (EAP), wellness program, or related coaching or counseling services. 

Key steps to include in an onboarding regiment for new hires should include:

1. Communication (video or phone call is best) from the team leader welcoming them before day one. From the time the offer letter is signed, it is critical for new employees to begin building a rapport with their direct manager.

2. Assign a mentor, peer guides, and/or co-workers with whom they can connect and ask questions.  Give guidance to co-workers, supervisors, and even senior leaders to understand the onboarding process and their role in it. Again, doing this as soon as the offer letter is signed should drive not only an immediate connection but also the likelihood that the new hire actually starts work on day one.

3. Provide access to, and awareness of key leaders in their part of the organization, for introductions to the vision, mission, goals, and key business objectives/initiatives of the new organization.

4. Share the values of your team and having team members reflect on those during their chats about their functional areas.

5. Send a new employee announcement message to help others become familiar with new hires and foster relationship-building.

6. Invite the new hires to join new hire groups to provide an initial set of opportunities to meet, mingle and build an internal network.

7. Develop an individual development plan (IDP) that is tied to any skill or capability shortcomings that came up during the selection process.  Make sure that training and upskilling begin immediately to send a message of development as being critical both to their role and what the company values.

8. Assign early win opportunities that leverage their strengths, e.g., special projects or assignments that offer chances for success, meaningful contributions, exposure to senior management, etc.

9. Regularly discuss their observations on strategies, tactics, techniques, perspectives, and data related to more efficient and effective work methods, market approaches, etc. from their previous jobs and companies.  Make sure that they feel that their prior experiences are both valued and valuable.

10. Build lasting relationships as a key for retention, to get the new hire to meet as many people as possible in their direct orbit. Plan how to re-introduce key people, remembering that the first introduction will be one of many in their first few months.

11. Leverage regular new hire listening systems to engage their feedback on how the transition is working and how they are feeling (think safe, secure, appreciated, welcomed, etc.) about being part of the new organization. 

Solutions at the system or corporate level

Solid onboarding practices that are made available for all newly hired employees can also contribute to a rejuvenated sense of security and belonging for those who have gone through a layoff. These include enterprise (or business unit/location)-wide capabilities, programs, and services that engage the new hire as early as offer acceptance and are useful throughout an employee’s first year or more. Examples include:

1. Create a formal pre-boarding process, where soon-to-be employees are sent paperwork or information via a new hire portal with employment paperwork and forms, policy or employee manuals, benefits enrollment, etc. before their first day of employment.

2. Provide an onboarding schedule so they know what to expect on day one.  Include information and access to all employee and business services-related organizations such as payroll, purchasing/procurement, finance, HR, L&D, etc.

3. Leverage a digital onboarding platform that offers 24X7 digital access to new hire paperwork, employee directories, organization charts, learning and development programs, knowledge management portals, building and site maps, employee services, payroll and benefits information, etc.

4. Send company “swag”, such as polo or tee shirts, a water bottle, notepad, coffee mug, etc. with the company logo on it to make people feel part of the team.  For college hires accepting a job pre-graduation, consider sending wearables or a computer backpack for use while still on campus to promote the company.

5. Provide formal exposure to the company culture, values, and leadership team members through videos, (live or virtual) orientation programs, and handouts and giveaways (screen savers, mouse pads, plaques), etc.

6. Set them up on day one with a fully outfitted desk or office with their ID badges, passwords, handbooks, a map of the building, and anything else that will make their life easier. If work is remote or hybrid, provide such materials as needed for the home office as well.

7. Create an onboarding management system that tracks new hire activities and automates reminders to them and their team leaders with commonly forgotten tasks.

8. Provide clear and precise job goals, especially showing how the new job’s objectives contribute to those of the department, function, and larger organization.

Other considerations

With the current prevalence of layoffs across industries, there is a likelihood that your own organization is hiring while simultaneously laying off other employees. With that in mind and while simultaneously planning for the recently laid off new hires’ needs, also reflect on the needs of existing employees who may have “survived” a layoff in your own organization. Employees who are being asked to welcome new co-workers during or after a reduction in force may well be struggling with their own loss of trust, anxiety, lack of job security, and guilt over having kept their job. They may not understand why their former co-workers were let go while others are being brought in.  

Change management strategies come in handy at this stage of an organization’s transformation – communications, focus groups, skip-level sensing sessions, and other vehicles for helping existing employees process the rationale behind concurrent job cuts and hiring.  Such staffing strategies are typically based upon the need to reduce staff in one less critical or successful function or business while staffing up in others that are associated with future growth and product/service offerings.  Those can be difficult to explain and understand by lower-to-mid-level employees who are not part of the strategy-generating leadership group. However, employee awareness and understanding/acceptance are crucial elements to regaining the trust and retaining the loyalty and production of all employees during such transitions. 

And of course, avoiding layoffs through other means is always a preferred method, given the lost productivity and performance that often (inadvertently) accompanies reductions in force. Companies who were able to “ride out the storm” during COVID without those took steps such as:

• Furloughing employees temporarily instead of conducting layoffs

• Reducing salaries temporarily (while staying in compliance with wage laws) 

• Providing stock in lieu of salary increases   

• Engaging employees in suggestion systems for money-saving ideas

Relevant Practices & Tools

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Conducting Development Planning to Establish Business-aligned Learning for Each Employee. >

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Creating a 180-day Plan with Actions and Milestones to Target the Highest-Impact Performance Areas for a Successful Role Start. >

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Building a Culture of Coaching and Mentoring that Creates a Continuous Learning and Improvement Environment. >

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The Individual Development Plan (IDP) Tool: Capture Targeted Employee Learning and Development Actions for a Performance Period. >

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