This is what managers should try before resorting to layoffs

August 24, 2024

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Economic uncertainty can cause leaders to go into survival mode and look for ways to cut costs. Not surprisingly, one of the most common strategies is reducing headcount.

On paper, this move makes sense. Reducing a company's workforce will have an immediate positive impact on the bottom line. However, adopting this type of lean practice in the “year of efficiency” – as Mark Zuckerberg called it in 2023 – can backfire in the long run. What's the alternative? Improving collaboration. Increased collaboration between teams and leadership can steadily increase productivity without having to resort to mass layoffs.

More effective communication in the workplace does not immediately produce positive results, which is why many leaders resort to layoffs. However, layoffs can be detrimental to a company's success. For one thing, they can destroy company culture and greatly reduce trust between employees and managers. Once that trust is broken, it is difficult to restore. As cited in a Harvard Business Review article, Edelman's research shows that 85% of people worry about losing their jobs. By playing on that fear, employers are destroying the trust they have with the people who are left behind.

Related: Thinking about laying off employees? Here's why job cuts could be bad for your business

Let's talk about the people who keep their jobs. Guilt creeps in for those who are chosen to stay. Yes, they may be relieved, but they may also live in constant fear that they might be next – or that they shouldn't have been the ones to stay. This uncertainty slowly erodes their ability to focus on work. It can also reinforce their suspicion that their company, no matter how much it claims to be people-focused, will always resort to layoffs when times get tough.

If these seeds of worry and unrest spread, they can negatively impact the employer's brand and make it harder to find and retain top talent. A Visier researcher explained that up to 8% of employees leave voluntarily after a layoff, usually within 105 days of the layoff announcement. And it might not be easy to replace those team members. Good candidates will always think twice about applying to companies with a history of layoffs.

For these and similar reasons, all companies need to consider other approaches, such as the various ways to improve communication in the workplace, before downsizing their departments. After all, communication is crucial, and in most cases, no company, including yours, does it efficiently or effectively.

The connection between human communication and corporate profitability

Does poor communication in the workplace really hurt your bottom line? Yes. According to a 2024 Grammarly report, knowledge workers spend 88% of their time communicating. With so much communication, any disruption can affect productivity. And disruptions do exist. A whopping 55% of professionals say they spend an excessive amount of time composing or decoding messages, which causes anxiety in 53%.

Of course, many managers and teams try to avoid communication mishaps caused by meetings. But unfortunately, as Otter.ai notes, unnecessary and unproductive meetings can result in millions of dollars lost each year. The problem becomes even more pronounced when you have hybrid and remote employees, which make up about 40% of all workers. Successfully coordinating team communication across geographic, time, and other boundaries can be difficult without a plan.

In other words, there are probably dozens of holes in your communications machine. By closing those holes, you can improve the employee experience and help them do better work, faster. By doing so, you not only improve the speed and quality of everyone's output, but you also help reduce costs—all without having to lay off a single person.

Related: How to avoid these common communication mistakes in the workplace

How to improve communication in the workplace

If you like the idea of maintaining the morale you've built and the knowledge your employees bring to your company, start putting new communication approaches into practice.

1. Establish a thoughtful rhythm for team meetings

Do you feel like you have unnecessary meetings? You're probably right. We've become accustomed to organizing face-to-face and virtual meetings spontaneously and spontaneously. Unfortunately, most meetings don't have a clear goal or purpose.

You can get around this problem by being very intentional about when you meet. For example, start the week on Monday or Tuesday with a team video or a face-to-face meeting, depending on how your workplace is structured. Share what was accomplished in the past week, what goals each person is pursuing, and maybe something personal. This meeting gives everyone a path forward.

At the end of the week, hold one-on-one meetings with your direct reports. These meetings are meant to be a kind of barometer of sentiment, providing an opportunity to discuss project deadlines, goals, deliverables, and expectations. Remember, one-on-one meetings allow for a human connection. For example, Adobe introduced the “check-in” approach, replacing annual reviews with regular one-on-one meetings. This concept increased employee engagement and performance because it provided space for ongoing dialogue and feedback. Ultimately, the introduction of these one-on-one meetings helped create a culture of growth and support in the workplace.

2. Use psychometric tools to reduce communication problems

Use AI and technology to help your employees communicate better. There are now psychometric products that can help employees interact better with each other. Remember, we don't necessarily work side by side anymore. This means it can be difficult to understand how a colleague likes to absorb and interpret information. Psychometric solutions can break down this barrier.

For example, a psychometric assistant can make targeted suggestions for composing an email to a specific colleague based on the colleague's psychometric data. The finished email is easier for the recipient to understand and reduces the likelihood of misunderstandings.

Psychometric tools can also help determine the right visuals, audio cues, and other aspects for the meeting. By evaluating the psychometric needs of all participants, a system can develop better ways to engage all participants.

Related topics: How to use the power of communication when faced with challenges

When you and your team use these cutting-edge solutions, it will increase your ownership, confidence, and authority. It will also reduce the amount of micromanagement you have to deal with. This will allow everyone to collaborate more effectively in both real-time and asynchronous situations. Ultimately, better communication is also good for the bottom line, especially since Asana has shown that 55% of employees at highly collaborative companies report consistent increases in revenue.

Cutbacks may be necessary, but they are not the inevitable solution to weathering an uncertain economy. Optimize your communication practices before you lay off employees. That could be all you need to increase success, and you won't have to deal with the consequences of layoffs. And best of all, everyone will be successful.