In today’s fast-paced and dynamic business world, the work environment is constantly evolving to keep up with changing market conditions and technological development. While this can lead to increased productivity, it can also have a significant impact on employee well-being if a company doesn’t handle the challenges well. Understanding the impact of a continuously changing work environment on employee well-being is crucial for businesses to help ensure their employees are healthy, engaged, and motivated. 

Employee well-being is critical for the success of any organization. Research has shown that happy and healthy employees are more productive, innovative, and committed to their work. On the other hand, when employees are stressed, burned out, or disengaged, their performance suffers, leading to decreased productivity, higher turnover rates, and lower job satisfaction. That’s why employee well-being is not only important for employees but also has a significant impact on corporate business outcomes.

Factors that can create instability at work

In any work environment, various factors can create instability and uncertainty, leading to a continuously changing work environment. Changes in leadership, unclear objectives, the anticipation of layoffs, and a toxic environment are a few of them. By understanding how these factors impact employees and businesses overall, employers can take proactive measures to mitigate their negative impact on employee well-being.

Changes in leadership

In an organization, there may be instances where one or more top leaders decide to part ways with the company or are terminated due to underperformance. In both cases, the team faces a lack of leadership for a specific period, which can cause instability among teams. To ensure as little interruption as possible the key is to communicate the steps moving forward. 

In cases where the company intends to find a replacement, it is important to communicate the lead time for filling the position. If there is no intent to find a replacement, the company should provide interim and long-term plans to the team. Providing clarity on these matters can help ease speculation and reduce stress among team members.

Frequent leadership changes can result in further instability and reduce employees' trust in the company as they will start to expect the situation to repeat itself. Therefore, employees may become less committed and engaged, making it challenging for a new leader to get their buy-in. Additionally, as each leader brings their own way of doing things, repeated changes can create confusion and decrease team performance.

On the other hand, the transition phase is a great opportunity for the company to identify the high-potential employees, employees who step up and lead the team either temporarily or long-term. However, it is essential to have a conversation with these employees to set expectations on workload and deadlines to avoid burnout and other negative impacts on employee well-being.

Lack of clearly defined objectives 

Employees require a clear vision to take applicable action steps and head in the right direction. When a company itself is unsure what its objectives are it creates chaos and confusion among employees. On the other hand, even when a company defines their new objectives, it can still neglect to communicate those effectively to the organization. In either case, employees will struggle to assess what to focus on and ultimately it can lead to stagnation due to a lack of clear goals. 

Often the tasks assigned in the phase when the company is redesigning its objectives are time fillers and don't bring much value. Without a clear strategy, whatever action is taken may not bring appropriate results. In such situations, the best approach is to identify the objectives and involve employees in shaping the strategy moving forward. By leveraging their diverse experiences, employees can feel valued and part of the company, which increases their engagement and commitment in the long run.

Anticipation of layoffs

Unfortunately, layoffs have become increasingly common, coming either unexpectedly or communicated with employees in advance. Either way, after the first wave of layoffs employees are faced with two pressing questions: "Will I be next?" and "Will I have to pick up the work of those who have left?"

Layoffs bring instability and uncertainty to the workplace. If there are no clear communications, employees will start to wonder when there will be a next round. With this way of thinking employees may begin to seek alternative employment opportunities. They will prioritize their own survival and security over the investment in their current job. While it might be a natural human reaction, it has a negative impact on morale and teamwork.

This type of situation calls for the company to be transparent and keep its word. If the company announces there won’t be any more layoffs and then some months down the line it conducts additional ones, the company will damage its reputation and the trust of employees will be broken.

Toxic Environment

Working in a toxic environment isn't healthy nor it is an environment employees can thrive in - it's impact on employee well-being can only be estimated. However, prolonged exposure to toxic environment can lead to stress, burnout, and depression. According to the McKinsey Health Institute survey toxic workplace behavior is the biggest predictor of burnout symptoms and intent to leave. Toxic culture can manifest in different shapes and forms such as toxic leadership or harmful employees and can be seen in behaviors like micromanagement, blaming, bullying, gossiping, or even narcissism. 

According to the American Psychological Association’s 2022 Work and Well-being Survey results nearly one in five (18%) employees described their workplace as somewhat or very toxic. A toxic workplace was reported by 22% of employees in manual labor, by 21% in customer service/client/patient services jobs, and by 15% among those who have office jobs. It's important to note that even in companies with a generally positive work environment, toxic behaviors can still occur on occasion and should be addressed promptly. 

To weed out toxicity leadership must identify the source of the problem and take prompt action. Most of the time it includes letting toxic individuals go if there is no chance for improvement. This sends a very clear message that toxic behavior is not tolerated and that employee well-being is a priority for the company. 

Continuous change impacts both the employee and employer

Continuous change has become a hallmark of modern times. While change can bring many benefits it can also create significant challenges for both employees and employers.

Impact on the employee 

When changes occur in the workplace, employees usually divide into two groups: one that takes action and a second that doesn’t. The first group will increase their productivity to ensure that the employer is aware of the contribution they bring. The second group may delay starting tasks, prolong work breaks and start looking for a new job. What both groups have in common is stress.

According to the World Health Organization, stress can be defined as a state of worry or mental tension caused by a difficult situation. While occasional stress can motivate us to act, chronic stress can have a negative impact on our overall well-being. The way we manage stress determines how much it affects us, and when we are in a continuously unstable and stressful environment, managing stress can become a challenge.

Whenever exposed to an event perceived as stressful, frightening, or dangerous the human body goes to the flight or fight response. The response is triggered by the release of hormones that prepare the body to either stay and deal with a threat or to run away to find safety. This is a normal human reaction to ensure its survival. However, nowadays people are exposed to many more stimuli than their ancestors were, raising the stress levels they experience. If the employee is under continuous stress and the body doesn’t have enough time to relax and return to its baseline it can further lead to chronic stress which covers symptoms like decreased energy, fatigue, aches and pains, irritability, nervousness and anxiety, and burnout. 

Anxiety is an internal reaction to stress and according to the American Psychological Association anxiety is an emotion characterized by feelings of tension, worried thoughts, and physical changes like increased blood pressure. If an employee is continuously exposed to uncertainty the anxiety can easily intensify and lead to creating a negative narrative in the employee’s head. Anxiety can aggravate the employee and increase the instances of flight or fight mode since it is future-orientated and worrisome in nature. 

Strongly related to anxiety is burnout with its symptoms such as energy depletion, exhaustion, mental distance from one’s job or cynicism about the job, and reduced efficacy. It is a state that develops over time. Since the human body is not designed to experience a prolonged flight or fight mode, at some point the body will protect itself, which manifests as burnout. According to Gallup, there are five causes of burnout:

• Unfair treatment at work
• Unmanageable workload
• Unclear communication from managers
• Lack of manager support
• Unreasonable time pressure

When an employee works in a turbulent environment where there are many changes or there is no clear pathway forward, employees can easily feel overwhelmed and quickly develop burnout. Experiencing chronic stress, anxiety, and burnout have a negative impact on employee well-being and consequently on their productivity and the results they deliver. According to the American Psychological Association 2021 Work and Well-being Survey those who typically feel tense or stressed out during the workday are more than three times (71% vs. 20%) as likely to say they intend to seek employment elsewhere in the next year. 

When an employee decides to leave the company their approach to the next employer might be also impacted. Depending on the level of trauma they experienced they might develop trust issues with the next employer, be cautious and play it safe from day one. This can lead to reduced dedication and commitment to their work resulting in a lower return on investment for the company.

Impact on the employer 

When the company is facing various challenges, how it deals with those challenges creates a testimonial for its brand. It is a common practice to check the company's reputation on the review websites like Glassdoor or ask for opinions from professional networks or even friends. Employees share their opinions freely and either will recommend their company to others or not. And it isn’t only employees who share their experiences – suppliers, partners, and other external stakeholders’ feedback will also have an impact on how the company is portrayed. If the company doesn’t manage the challenges well and the negative feedback starts to spread, it can cause reputational damage.

Lack of trust is another consequence of poorly managed changes. In the beginning, the employee will naturally assume the company can manage the situation that has arisen. If the situation starts to get out of control and the leadership cannot manage it properly it is natural that employees will start to doubt in the capabilities of their leadership team. If the company faces the same issues repeatedly, employees will lose trust as they will see the company as incapable of running the business. On top of that, any new project or initiative that the company tries to implement will be approached with caution or even skepticism. Based on previous experience, employees will assume that it is going to be another failed attempt.

Apart from reputational damage and lost trust, a company that puts its employees through significant changes can lose its biggest asset: its employees. When employees must continuously adjust to the changes, they become depleted. If they don’t see hope for positive change, it’s natural they will look for other employment. This leads to a loss of tenured knowledge and experience, requiring the company to recruit and train new employees or distribute workloads among those who stayed. The latter will lead to the low morale of the team, which then can lead to more employees following suit in search of a better environment to work in. Continuation of this vicious circle can result in additional challenges for the company: difficulties in attracting new talent. It is important for the company to closely monitor the turnover rate as a high turnover rate indicates underlying dysfunction in the company.

What are the steps the company can take to ensure little to no impact on employees' well-being?

Although change is crucial for companies to stay competitive, it can heavily affect the well-being of employees. Companies can take various action steps to minimize the adverse effects and ensure that employees' well-being is not significantly impacted during such transitions.

Be transparent

The best approach the company can take in times of continuous change is, to be honest and regularly communicate with their employees. The uncertainty that is created by lack of communication adds stress which can be avoided. Of course, the transparency won’t remove the stress altogether however it gives an employee an opportunity to prepare for different scenarios. Employees might already know that for example, the company’s situation will require downsizing. Nevertheless, if employees are informed about what might happen it gives them psychological safety and time to prepare or act immediately. Otherwise, on the day when the layoff starts, they will be left surprised, lost, and overwhelmed. 

Open communication signals to employees that they are valued, and that the company is doing its best to protect them. This approach will go a long way in building a good reputation, as employees (even those impacted by the layoffs) will tend to speak well on how the company managed the challenges.

Provide external support 

A turbulent work environment is challenging for every single employee. The difference is in its management. Some employees can cope longer in times of change; however for others, continuous uncertainty can be too much to bear. The leadership team should be able to understand, based upon experience of which group each employee falls into and who need they look out more for. 

The company can decide to provide external support so that employees feel comfortable being open. That can be a therapist or Psychologist with whom to process the current circumstances if the employees need help in making sense of the situation they are in. Alternatively, a coach can help guide the employee in finding the answers to what should be their next action point.

A company might not have the resources to provide the same, especially when they are going through major layoffs. However, even giving an idea to employees to look for support outside of the organization can prompt an employee to act in the right direction.

Build employee resilience

Having different work and life experiences leads to different levels of resilience, which simply put is the ability to bounce back or adapt after experiencing difficulty. Helping employees to become resilient also helps the company to have a stronger workforce since resilience is a valuable skill that can be used in day-to-day challenging situations. 

Building resilience can be done via training where employees can learn how to regulate their feelings, look at things from a different perspective, become more flexible and agile and build self-esteem. It gives them the tools to have a sense of control over their choices in times of crisis so that they can come out of it better. 

Involve employees 

Leaving employees without clear information on what’s happening in the company leaves room for speculation that can lead to imagining or creating worst-case scenarios. To avoid that, the company can involve employees during the process of transition. That can be anything from looking for improvements on a team level to helping create a new strategy for the entire company.  

Utilizing employees in challenging times shows trust in employees’ capabilities, skills, and appreciation for their knowledge and experience. Once involved, the company's challenges become their challenges and they will work harder to find the most effective ways to help the company. 

Foster a safe environment

When times are tough it is easy for the employee to focus on themselves and their own best interests. That can create a toxic environment that significantly impacts collaboration. When employees look after themselves and their position only, they won’t share much information or be very helpful to their colleagues. However, without cooperation between employees or departments, the company will start to stagnate, and the work environment will get worse.

To ensure the work environment doesn’t become hostile or toxic, the company must continuously pay attention to what’s happening during the crisis. The employer can take steps to formally listen to/survey employees so that any conflicts that arise don’t get out of control.  Using such insights, the company can take prompt action when there are initial signs of unacceptable behavior and encourage employees to look after/support each other. When a company proactively takes action to protect its culture, employees will feel they can speak up when something starts to go astray, thus fostering a safe environment.

What steps should employees take themselves?

While it is the responsibility of companies to take measures to ensure the well-being of their employees, it is also important for individuals to take steps to protect themselves from the harmful effects of a constantly changing work environment. By taking proactive action they can manage their own stress and anxiety and improve their overall well-being.

Identify stressors and triggers

It's important to recognize that the continuously changing work environment can be stressful and overwhelming for employees. To manage stress and anxiety, employees can start by identifying the stressors and triggers that cause negative emotions and reactions. These stressors can be caused by people or circumstances, so it's crucial to observe themselves for some time and note down the stressful occurrences along with the thoughts and feelings associated with them. Keeping a record of situations, thoughts, and emotions can provide a better understanding of what causes stress and anxiety for each individual, helping them to identify patterns and develop coping strategies to manage stress and anxiety in a more constructive way.

Release stress and anxiety 

More often than not individuals manage their stress through unhealthy means such as consuming comfort food, binge-watching TV shows, or sleeping too much. Studies have shown that these techniques do not effectively reduce stress levels. A more proactive approach would be for employees to establish alternative strategies to release stress and anxiety. For example, engaging in physical activities like yoga, exercise, or taking a walk can be beneficial. Meditation is also a great stress-relieving technique that can be practiced throughout the day or before bedtime to prevent overthinking. Creating a consistent sleep routine that involves limiting caffeine intake in the afternoon and refraining from using electronic devices at least an hour before going to bed can also aid in reducing stress.

Establish boundaries

Employees may feel the need to be available 24/7, especially when they are constantly waiting to receive additional information or news about another change at work or want to discuss the changes and share their concerns with their colleagues after working hours. Nevertheless, establishing individual boundaries can provide a necessary break from work-related stressors. Boundaries may differ for each employee. For some, it can be abstaining from checking emails after working hours or putting work-related collaboration groups (e.g., What’s App) on mute, or for others simply disengaging from negative conversations. The key is for each employee to establish some form of boundary to prevent work-related stress from consuming their personal life. 

Take time to recharge

The importance of taking time to recharge cannot be overstated, especially during times of constant change in the workplace. The way each employee chooses to recharge will vary, from taking a full vacation with no access to emails, to a weekend getaway, or even just an afternoon spent unplugged on a long walk. It is important to dedicate this time to recharging, rather than using it to continue thinking about work, as tempting as that may be. Stepping away from the environment that is causing stress, anxiety or burnout gives an employee a chance to refresh and assess the situation from a less emotional perspective. Time away has significant importance as it can help the employee determine what’s best for them and how to advance in the ever-changing workplace environment.

Change is inevitable therefore creating a stable work environment is crucial for both employees and employers. Changes in leadership, unclear objectives, anticipation of layoffs, and a toxic environment can cause instability at work and lead to employee stress, burnout, and disengagement. Companies have a choice, either to take action to mitigate these factors or indirectly state that a stable and healthy work environment isn’t their priority. On the other hand, employees can also take steps to manage their stress levels and respond effectively to stressful situations. Ultimately, a stable work environment benefits everyone involved, leading to a more engaged and motivated workforce and a more successful company overall.

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