4 Ways People Managers Can Help Employees Cope with Layoff Fears

​Less than six months ago, companies were scrambling to hire enough employees to fill open positions. Now, with a possible recession on the horizon, many of these same companies are considering staff layoffs.

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Companies in the financial technology and cryptocurrency sectors are rescinding employment offers, and some, including Tesla, JPMorgan Chase, Netflix, Peloton, Redfin, Re/Max, Shopify and Coinbase, have announced plans to reduce their workforces. Experts are expecting layoffs to bleed into other industries, especially after the Bureau of Economic Analysis released data in July showing that the U.S. economy shrunk for a second straight quarter.

Rumors of possible layoffs always rattle employees and can impact productivity, even if the company they work for isn't talking about cutting staff. Nearly 80 percent of U.S. workers fear they will lose their jobs if there is a recession, according to a survey of more than 1,000 employees conducted by staffing firm Insight Global. A separate survey of more than 1,000 employees conducted by software firm ResumeLab found that 58 percent of respondents believe they will lose their jobs in the next six months.

"Rumors are often more damaging than layoffs itself, and this is especially true in organizations where there have been layoffs in the past," said Danielle Beauparlant Moser, an executive consultant with ManPowerGroup Talent Solutions in Raleigh, N.C.

Here are four ways people managers can help quell employees' layoff fears.

1. Be Transparent

Often, employees have no idea if their company is financially stable because management doesn't share financial information, said Jill Santopietro Panall, SHRM-SCP, owner of 21Oak HR Consulting in Newburyport, Mass.

"Management doesn't have to open the entire ledger to everyone, but they need to give employees a good sense of the overall financial picture so they know if their fears are accurate," she said.

Be honest with staff and let them know whether the company is expected to have a successful year or if difficult times are ahead, she said.

Keep in mind that there could be an information vacuum because many employees aren't working onsite full time, said Nancy Halpern, leadership coach and founder of Political IQ, a New York City-based consulting firm that diagnoses political dysfunction in organizations.

"At times of uncertainty, many companies say very little, and what they do say is very generic, and then people will anticipate the worst possible outcome," she said. To avoid rumors, Halpern recommends managers overcommunicate with their staff and avoid using cliches.

2. Maintain Composure

Remember that the manager sets the tone, so be careful not to show panic, Panall said.

"If you, as a manager, don't know what's going on with the bigger picture, you need to find out," she said. "You don't want to inadvertently be the conduit of rumors and fears."

If employees are working onsite, be careful of appearing overly secretive. "Closed-door meetings and whispers can lead to staff panic," Panall said.

3. Encourage Cross-Training Staff

Despite fears of a recession and possible layoffs, some companies still say they seemingly can't hire enough people or keep up with demands for certain goods.

Managers can help shift employees into much-needed positions by advocating for cross-training, Moser said. "It's cheaper to redeploy existing staff than to find new talent," she said.

Let staff know that if there are layoffs, management may consider redeploying talent, Moser says. Then find out what skills employees are interested in learning and give them a stretch assignment that connects them with another department.

"Employees want their employers to approach them with employment opportunities and possible career paths," Panall said. 

4. Focus on What Employees Can Control

Remind staff that it's a good practice to always have an updated resume and LinkedIn profile and to keep in touch with their professional network, Halpern said. Help staff see the possibility of a layoff as a bump in the road of a long career, and remind employees that there will be other opportunities.

"Be as honest as you can be and let your staff know you care about them and their careers," Moser said.

Lisa Rabasca Roepe is a freelance writer in the Washington, D.C., area.