- Company layoffs have a devastating impact on workers who lose their jobs - and the colleagues they leave behind.
- Artificial intelligence-powered outskilling can better equip laid-off workers for the next step in their career.
- Business leaders must take the lead in helping their companies and employees prepare for an uncertain future.
Confused. Lost. Ashamed. Crushed.
These are the words we hear from workers impacted by layoffs, many of whom break into tears as they tell us about one of the most devastating experiences of their lives. On top of the psychological burden, 83% of laid-off workers have a higher chance of developing health conditions, and sadly, are more likely to commit suicide.
The impact of being laid off also lasts well beyond the time the employee is informed they’ve lost their job. Research from the Harvard Business Review shows that 20 years after the event, laid off workers still earn 20% less than their peers, and behavioural scientists have suggested that it takes longer to recover from the pain of unemployment than from losing a loved one.
An even less talked-about reality is the impact a round of layoffs has on workers who remain with the company. These employees end up with 41% lower job satisfaction, 20% lower job performance, and 31% higher voluntary turnover. Layoffs often have a negative ripple effect on morale, productivity, and retention that leads to a massive hit to the bottom line.
Layoffs, as they are carried out today, are often inhumane. We are also seeing that with increasing business disruption and automation - not least due to the ongoing COVID-19 pandemic - layoffs are not going anywhere and may even increase in frequency and intensity.
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As Emily Schur, Senior Vice President of Talent at Sun Life Financial, puts it, “The challenge for management is to change our thinking on the cycle of automation, innovation and expense pressure. Instead of blunt layoffs as the first line of defense, how about proactive and intentional reskilling and outskilling to help people land softly into their next opportunity - be it internally or externally? Supportive transitions instead of shock displacement will have positive outcomes for companies, families and communities.”
So the question is - in a world where business leaders are reimagining every part of their employee lifecycle, why are layoffs still as destructive and inhumane as they were 30 years ago?
Layoffs: The last frontier of talent innovation
In the past decade, companies have adopted numerous innovative talent initiatives to begin adapting to the future of work, from recruiting processes and employee benefits to learning and development. But even the most future-focused companies almost never mention layoffs, even though they are a reality in every one of their businesses.
For too long, layoffs have been too taboo to discuss. Zabeen Hirji, former CHRO of Royal Bank of Canada and Deloitte’s Executive Advisor on Future of Work, says, “Unlike other parts of the talent and skills agenda, most executives have not personally experienced layoffs and perhaps the missing piece in this puzzle is empathy.”
But despite this lack of empathy, all business leaders must grapple with the fact that layoffs may increase in the coming years - and it’s up to them to adapt. It is long overdue that we talk about layoffs and the impact they have and begin the work of reimagining them as we have with every other element of the employee lifecycle.
Reimagining layoffs through AI-powered outskilling
Perhaps ironically, the solution of how to reimagine layoffs and better equip affected workers for the next step in their career may be powered by the same element that is causing some of the job losses: artificial intelligence.
Imagine, for a moment, a world where every single worker whose job is impacted by disruption was supported to land softly in their next opportunity through a personalized, AI-powered journey that:
1. ‘Locates’ you: parses your resume to understand your skills and interests
2. Recommends ‘destinations’: real-time labour market information like demand and automation predictions to recommend career paths
3. Creates a personalized ‘roadmap’ to get you there: identifies specific learning programmes and career resources to support you towards a successful career outcome
This is something FutureFit AI offers through our AI-Powered GPS for career transitions. We have taken millions of resume and job posting data points, built a marketplace of learning opportunities and other support services, and created a system of human and virtual support to ensure laid off workers have all the resources they need to succeed.
In 2011, Nokia revamped their approach and introduced a “Bridge” programme that provided multiple pathways for workers to identify their next opportunity inside or outside the company. The innovative programme reduced costs per employee by over 90%, while employee satisfaction jumped to 85%, even among employees that were let go.
We anticipate and encourage even more solutions being introduced as business leaders address this destructive part of the employee lifecycle. AI-powered outskilling provides executives with the opportunity to turn transitioning workers into brand ambassadors and attract future talent through a commitment to take care of people.
A stark choice: proactive leadership or reactionary crisis management
Mental Health. #MeToo. COVID-19. BLM.
If there is one thing we have learned in recent years, it is that where there is human suffering or injustice, that crisis is probably already impacting the bottom line, and sooner or later every business will either act proactively to address it or to reactively try to catch up.
Business leaders are in a strong position to change this reality. The decision to even ask about how their company approaches layoffs can often set off a domino-effect of actions that will change companies for the better.
If every mass layoff was covered in detail on the front page of the Wall Street Journal, with anecdotes from impacted workers, no business would do their next layoff as they are today. So why wait for the next front-page headline?