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Survey: Layoff 'Survivors' are Anxious, Angry

John Commins, for HealthLeaders Media, January 12, 2009

The daily news is destroying the myth that hospitals are recession-proof. Yes, there is job growth, even during tough times. The Bureau of Labor Statistics reports that 372,000 healthcare jobs were created in 2008.

Of course, physicians and nurses remain in high demand. But there is also plenty of misery out there. Just ask employees at Blue Hill Memorial Hospital in Bangor, ME, Lee Memorial Hospital in Fulton, NY, Sparrow Hospital in Lansing, MI, Wilkes (PA) Regional Medical Center, or Weirton (WV) Medical Center.

If your hospital has recently undergone layoffs, don't expect "surviving" employees to work harder or pick up the slack out of sheer gratitude for not getting canned. Washington, DC-based consultants Leadership IQ found in a new survey that 74% of 4,172 surviving workers at 318 companies that had undergone layoffs in the last six months reported a drop in productivity. In addition, 69% of those surveyed survivors say the quality of their company's product or service has slipped since the layoffs; 87% say they are less likely to recommend their organization as a good place to work; 64% say the productivity of their colleagues has declined; 81% say customer service has declined; 77% say they see more errors; and 61% say they believe their company's prospects will worsen.

When asked to describe their feelings following the layoffs, the LIQ survey found that "guilt," "anxiety," and "anger," were the most commonly used nouns. "This study shatters a few myths," says Mark Murphy, chairman of LIQ. "Most CEOs and organizations have operated under the idea that if you lay some people off the people who remain would be grateful that they still had a job and would double their efforts."

Murphy says most organizations do a pretty good job of softening the landing for laid-off employees, but they're not so quick to assuage the fears of the employees who remain. "What gets missed is that when an organization does a layoff there is a huge impact on the folks who remain," he says. "They are feeling anxiety and anger and wondering 'if my good friend got laid off do I believe that this is the end or am I a couple months away from being in the same boat?'"

That's particularly true of hospitals because most hospital administrators have no experience with the agonizing process. A botched layoff, however, can have tremendous impact on a hospital, where quality and productivity lapses are measured in lost lives and other potentially catastrophic health outcomes.

"Hospital employees have unbelievably long memories," Murphy says. "A one-time mistake where they believe the organization's priorities are not in the right place, and they will harbor resentment for decades to come."

So, what do you do?

1. Be honest, accessible, candid, compassionate, and as transparent as possible with surviving employees, especially in the anxious days immediately after the layoffs. "The biggest thing leaders have to do after a layoff is engage," he says. "Too many feel shamed or embarrassed or nervous, and they hide out in the executive suite. You can't pretend the layoffs didn't take place."

2. The LIQ survey found that workers who gave their managers high scores for visibility, approachability, and candor, also were 72% less likely to report a decline in their own productivity, and 65% less likely to report a decline in the quality of their company's product or services.

That means that front-line managers must be briefed before the layoffs are announced, so they can address the barrage of questions they will face from the workers they supervise. "Otherwise you will waste any potential cost savings from the layoff on lost productivity, quality problems and service breakdowns," Murphy says.

3. In the days immediately after the layoffs, schedule group meetings with your employees. Let them vent, but structure the meeting for more than a carping session. Employees aren't necessarily looking for the feel-good answer. They're looking for the truth. "Everybody recognizes now that these are tough times," Murphy says. "What has always bugged them is transparency. They want to know how the leaders made the decision. How did they come up with that particular plan? What are the metrics they are going to use to determine if another layoff is necessary? Help them understand."

Schedule meetings every month or two to update employees, depending upon the pace of developments at your hospital.

4. Don't leave 100% of the workload for 90% of the surviving staff. "That's really where quality suffers," Murphy says. "You have to get rid of the waste and efficiencies, even if it's only something symbolic like getting rid of a particularly inefficient meeting."

Solicit employee suggestions about "dehassling" their jobs and eliminating waste. "We're not talking about throwing out insurance forms or government regulations, but it may be the 20 minutes they spend looking for an IV pole," Murphy says. "When employees are engaged in helping solve the problems it gets them through this survivor guilt."

5. Finally, if you're planning capital improvements in the midst of layoffs, you'd better be ready to either justify them, or cancel them if you can't. "If you can make the case that you have to upgrade the surgical suite because it will have a direct impact on the patient experience and safety, you're in great shape," Murphy says. "But if the argument is 'we want a new atrium or fish tanks in the lobby," that's a little dicier."


John Commins is the human resources and community and rural hospitals editor with HealthLeaders Media. He can be reached at jcommins@healthleadersmedia.com.
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