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- Studies have shown that quitting can be contagious.
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New research suggests that layoffs may be linked to the same phenomenon.
- The findings are crucial for companies like Disney and Twitter, which often conduct layoffs.
Since long ago, researchers have known that quitting can be contagious.
One employee's departure can have ripple effects on other members of the team, making it more likely that the remaining workers will follow their lead and leave. This phenomenon may explain why workers are still leaving their jobs and staying put during the Great Resignation.
New research shows that layoffs can be correlated with the same behavior. Visier, an analytics company that specializes in human-resources analysis, found that employees who were terminated or laid off had 7.7% more chance of their direct colleagues quitting than if they had remained. Visier published a study on turnover contagion after resignations. Later, it detailed its findings related to layoffs via a LinkedIn post.
Corporate America is seeing layoffs increase. Twitter reported that 200 employees were fired over the weekend, in addition to the 7,500 employees it laid off last year. Meanwhile, tech giants like Google, Microsoft, Goldman Sachs, and Disney are also losing workers. These findings could have serious implications for companies that recently laid off large numbers of employees, or are contemplating doing so.
"A layoff could be an information signal"
Companies that recently held mass layoffs (e.g., Amazon, Salesforce, Compass) should expect to see a lot of resignations.
Insider was told by Andrea Derler, Visier's principal researcher, that "our recommendation is: Beware." If you are doing layoffs, it might be worth adding 7% to 8% to the number of people who are likely leave.
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Visier's 17 million anonymous employee records from around the globe was used by researchers to find that employees who were fired were more likely than their colleagues to do so. This increased likelihood started on the first day of the peer's firing or layoff and was sharply increased between 45 and 105 days following the termination. The peak was around 75 days. This research pool included cuts that occurred between February 2019 to June 2022.
People might decide to leave their job for many reasons. They could be assigned a new manager that they don't like, or offered a great opportunity. Or they might have changed their family circumstances and need to move.
It is also understandable that employees who have survived a layoff may decide to leave quickly. Layoffs can be very distressing. It's natural to be worried about who might be the next person cut in your team, if that happens. In this case, quitting might be an act to protect yourself.
Insider was told by Elena Obukhova (associate professor of strategy and organizational at McGill University). "A layoff could be an information signal." It can be a sign of future direction or solvency for your company.
You might also notice an increase in workload if the headcount of your team decreases. This could also make it tempting to submit your resignation letter.
It is possible that social ties are also a factor. It is possible to feel guilty about being spared, or you might miss your colleague who has passed away. You decide to explore other options.
"People wonder if the pandemic has diminished social ties — there's the thought that we don't need to have the gossip or water-cooler conversation anymore," Obukhova, an economist socioologist, said. Obukhova's research examines how culture and social relations shape markets.
"But even after COVID, people still require that social embeddedness.
How managers can stem domino departures
Gallup estimates that voluntary turnover costs American companies $1 trillion per year. It's also difficult and costly to hire in such a tight labor market. Executives who are considering layoffs might be prompted to reconsider.
Obukhova stated that leaders of companies who have already reduced staff must be aware of the consequences and take steps to reduce the likelihood of more resignations. "Make sure the layoffs don't completely destroy peoples' sense of belonging and community."
Managers might not always be aware of the social connections between their team members, especially if they work remotely or in a hybrid setting. While bosses might be present on Zoom calls with their team, they may not see that team members text on a regular basis.
Derler suggested that managers speak to their remaining employees. Managers may avoid having these kinds of difficult conversations because it is hard for them to do so. They must think about the salary, growth, market value, and other factors that affect their team members.
"Ask them how they feel."
This story was first published on January 19, 2023.
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By: rknight@insider.com (Rebecca Knight)
Title: Layoffs can cause contagion that pushes workers who are left behind to quit
Sourced From: www.businessinsider.com/layoffs-quitting-remaining-coworker-resign-turnover-left-behind-contagion-research-2023-1
Published Date: Mon, 27 Feb 2023 18:06:00 +0000
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