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How do you keep employees engaged and limit attrition once announcements have been made to cut headcount?

LOGAN, Product Marketing Manager - Fortune 500 Software Company

Keeping a team focused in the face of change and uncertainty is a daily struggle in many companies.

Ah. The dreaded down-sizing announcement. I would venture a guess that most of us have lived through such a notice.  And if you haven’t, you will. So thank you for surfacing a very important question. It provides us with an excellent example of a critical component of effective leadership: Managing Change. Managing change effectively requires us to use all of the skills and behaviors we have developed in Managing Conversations and Managing Relationships. And a few new ones thrown in for good measure.

As the pace of change in our world increases exponentially, we all must learn to adapt and embrace it as the new normal. Research shows that humans don’t like change. There is both a neurological and a visceral response to something out of the ordinary and the threat of change to one’s normal at work can be a huge roadblock to performance.  The announcement of mergers, reorganizations and consolidations, can strike both fear and excitement into a workforce. Helping to keep your team focused is Job One.


Let’s look at what happens to the body when something unexpected happens. The fight or flight response is triggered, flooding the brain with cortisol, adrenaline and nor-adrenaline, readying the body to rapidly and physically respond. Unfortunately, the announcement of staff reductions isn’t something one can physically fight nor flee. And if these chemicals remain at heightened levels in the body, un-metabolized by physical exertion, they can cause stress symptoms such as poor concentration, anxiety and frustration.


Before we get into the answer, let me tell you a story of two companies and the very different ways they managed their announcements of staff reductions and layoffs. The first company was a national retail store chain, where rumors of cutbacks and layoff had been circling for weeks. Rumors only, and the gossip ran rampant at the water cooler. No one was focusing and nothing was being accomplished, except for the few employees who had seen the writing on the wall and were engaged in copying their work products and client lists for use in their new positions.  Employees arrived to work one morning to the news of layoffs: clean out your desk in the presence of a security guard and leave the building. No severance package was offered and they were told they would have to sue to get their bonuses. Employees were handed a booklet for an outplacement firm.


The second company was a global financial services firm. This bank had announced that there would be staff reductions and layoffs eighteen months prior. They communicated the reasons and their intention to work closely with employees during this uncertain time. Employees were immediately given access to the same outplacement firm and time away from their current jobs to attend classes on assessments of their strengths and interests, resume writing, and interviewing.  At every step of the way this bank communicated its plans with the employees and coached them, working to ensure they were well prepared for their lives after the layoffs. Employees remained focused at work, because they knew they would land on their feet at the end. When they were finally let go, they were given very generous severance packages.


Both groups of employees met at an intro meeting at the outplacement firm and exchanged stories. The bank group spoke of their former employer with high praise, even though they had been through an experience which for many, is a devastating time in their lives. The empathy and respect with which they were treated led to continued strong performance of the group prior to their layoffs. The retail group had nothing but derision for their former company. And they told everyone who would listen.


As the bank demonstrated, it is possible to treat departing employees with respect. The consideration you show employees will determine whether or not they sabotage the work, remove proprietary information, or stick around supporting you and their team. So as you begin your preparation, keep in mind two important ideas: Transparency and Respect.


Returning to your question  Logan, I hear your two goals of reducing attrition and keeping employees engaged. Let me add another personal goal for you: helping your employees to win. It is the first step of respect. Change is like a hurricane and your role is to walk them through the storm.

This ability to embody others’ perspectives is mastered at the Catalyst’s level of leadership.

Preparation and Research

Your mental preparation is step one. Think about how you reacted to the announcement. What fears does the possibility of losing your job or having to change your position in the company conjure up? Your employees are probably experiencing similar fears. Imagine how you would react if you were in their position. And not only how you would react if you were in their position, but if you were them, with their history, their experiences, and their life situation. This ability to embody others’ perspectives is mastered at the Catalyst’s level of leadership. To assist yourself in understanding and appreciating others’ viewpoints, spend time in self-reflection. Do you solicit other viewpoints only to find those that agree with your own? Or are you open to being surprised by something you had not considered?

Please keep in mind that we can make assumptions about other’s reactions to change, but we’re not going to know the truth until we ask in our pivotal conversations.

Next, using the Catalyst’s wide-angle lens, shift to the wider frame. Step back to look at the broader picture, beyond individual reactions to this change. Your team still has a job to focus on and projects to complete. And the easiest way to do this is to help them re-examine individual and joint values, beliefs and goals: Shared values; belief in each other; common goals to support each other and do their best work. Review team meetings you held to establish roles and responsibilities. Revisit the vision you shared and how each employee would be a part of its implementation. The only control you have to limit attrition is the transparency and respect you show and the vision your employees feel part of. If you have created a compelling vision, if your employees feel they have opportunities to grow in their skills and leadership and to do their best work, you will remind them of this.

Research all you can about the staff reductions. If you are not privy to discussions at the decision level, ask your own manager. What is the cause? What does the company hope to accomplish? What opportunities will it create?  Become armed with as much information as possible. Knowledge is power, and you will share everything you can with the team, in the most transparent manner possible.  To the best of your ability, remove the uncertainty they feel. Treat your employees with the respect with which you wish to be treated.


Keep in mind that headcount reduction also generates new opportunities. What might those be?  Who on your team might take advantage of them? And how could you assist?


Pivotal Conversations

Review our earlier answer about pivotal conversations and managing relationships.

  • Acknowledge employee fears and empathize with them. Allow them to vent and listen well. Imagine how you would react if you were in their position.

  • After a proper acknowledgement, it is time to bring to focus back to the team.

  • Commit to keeping them informed. When you learn something new, you will share it if at all possible.

  • Remind them to reduce their stress level so they can remain focused. Take care of themselves. Go for a walk. Go out to lunch.

  • Offer to hold individual meetings so they may feel more comfortable discussing their concerns. You will also remind them of their earlier commitments and ask if anything has changed that you should be aware of. What opportunities has the staff reduction elicited? Could this be the push your employee needs to try out a new role in the company. Might they be better served elsewhere?


Be available to your employees and continue the work of inspiring the vision and empowering them.


Lastly Logan, find a personal coach or mentor with whom you can practice these discussions. Identify the behaviors you wish to work on and use these opportunities to continue your own growth as a leader.  

Remember, Change is inevitable. The only control we have is our own reaction to it.

Genesa Leadership offers leadership coaching in all facets of Managing Change. 

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