Here's What Leaders Need to Try Before Resorting to Layoffs | Entrepreneur

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

On paper, the move makes sense. Reducing any organization’s workforce will have an immediate bottom-line effect. However, embracing this type of lean, “year of efficiency” practice — as Mark Zuckerberg coined it in 2023 — can backfire down the road. What’s the alternative? Improving collaboration. Increased collaboration among teams and leadership can increase productivity steadily without necessitating widespread terminations.

Improving effective communication in the workplace won’t give instant bottom-line results, which is why many leaders turn to layoffs. However, layoffs can be harmful to a company’s success. For one thing, they can destroy the organization’s culture and greatly decrease worker-management trust. Once that trust is broken, it’s hard to regain. As cited in a Harvard Business Review piece, job loss is a worry for 85% of people, per Edelman’s research. By making that fear come true, employers sever their trust bonds with the people left behind.

Let’s talk about those people who retain their jobs. Guilt tends to run rampant among those who’ve been chosen to stay. Yes, they may feel relieved, but they also may live with the constant concern that they could be next — or shouldn’t have been the ones to stay. This uncertainty slowly erodes their ability to concentrate on work. Plus, it may increase their suspicion that no matter how people-centric their company says it is, the company will always revert to letting employees go during rocky periods.

As these seeds of worry and unrest spread, they can affect the employer’s brand and make it harder to source and retain top talent. One researcher from Visier explained that up to 8% of people may leave of their own accord after a layoff, typically within 105 days of the layoff announcement; and replacing those team members might not be easy. Good job candidates will always think twice about applying for positions at businesses known for layoffs.

These — and related consequences — are why all organizations need to consider other approaches, like the different ways to improve communication in the workplace, before reducing the size of their departments. After all, communication is essential, and more often than not, it does not occur efficiently or effectively at any company, including yours.

The connection between people communication and business profitability

Is poor communication in the workplace really taking a bite out of your profits? Yes. Eighty-eight percent of knowledge workers’ time is spent communicating, according to a 2024 Grammarly report. With so much communication happening, any snags can interrupt productivity. And snags are happening. A full 55% of professionals say they spend excessive time crafting or deciphering communications, which causes 53% to struggle with anxiety.

Of course, many managers and teams try to mitigate communication missteps with meetings. Unfortunately, as Otter.ai points out, unnecessary and unproductive meetings can lead to millions lost annually. The problem magnifies when you have hybrid and remote employees, which account for around 40% of all workers. Successfully coordinating team communication across geographic, time-related and other boundaries without a plan can be tough.

In other words, there are probably dozens of gaps in your communications machine. By closing those gaps, you can improve the employee experience and help workers do better work faster. This will not only improve the speed and quality of everyone’s output but will also help keep costs lower — all without having to cut a single person.

How to improve communication in the workplace

If you like the idea of holding onto the morale you’ve built and the legacy knowledge your employees bring to your organization, start by putting new communications approaches into practice.

1. Establish a thoughtful team meeting cadence

Feel like you have needless meetings? You’re probably right. We’ve become accustomed to setting up face-to-face and virtual meetings at the drop of a hat. Regrettably, most meetings don’t have a clear end game or purpose.

The workaround for this issue is to be very deliberate about meeting times. For instance, kick off the week on Monday or Tuesday with a team video or in-person meeting, depending on your workplace structure. Share what was accomplished in the prior week, each person’s upcoming goals and maybe a personal item. This meeting gives everyone a path forward.

At the end of the week, host one-on-one meetings with direct reports. These meetings are intended to give a “mood meter” reading. They’re the chance to review project deadlines, objectives, deliverables and expectations. Remember that one-on-ones allow you to have a human connection. For example, Adobe introduced the “Check-in” approach, which replaces annual reviews with regular one-on-one feedback sessions. This setup enhanced employee engagement and performance by allowing room for continuous dialogue and feedback. Ultimately, establishing these personalized meetings helped create a culture of growth and support within the workplace.

2. Leverage psychometric tools to reduce communication friction

Use AI and technology to help your people become better communicators. Psychometric products now exist that can help employees better relate to each other. Remember that we don’t necessarily work side by side anymore. That means it can be tough to understand how a colleague likes to receive and interpret information. Psychometric solutions can break through this barrier.

For example, a psychometric assistant can make pointed suggestions on how to write an email to a specific colleague based on the colleague’s psychometric data. The finished email will be more understandable to the recipient, lowering any chance of misunderstanding.

Psychometric tools can also help determine the right visuals, audio prompts and other meeting considerations. By evaluating all attendees’ psychometric needs, a system can devise better ways to engage all participants.

Availing yourself and your team of these leading-edge solutions promotes empowerment, confidence and authority. It also minimizes your need to micromanage. Consequently, everyone can collaborate more effectively in both real-time and asynchronous situations. Ultimately, better communication is great for profits, too, especially since Asana has shown that 55% of employees at highly collaborative companies report steady revenue improvements.

Cutbacks can be necessary, but they aren’t the inevitable solution to riding out an uncertain economy. Tweak your communication practices before letting people go. It could be all you need to get more wins, and you won’t have to deal with the fallout of terminations. Best of all, everyone succeeds.

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