Picture this! You are part of a closed-knit team. You know where exactly you stand in the organization and the next day it all changes. With the announcement of a fundamental corporate re-structure, uncertainty looms. The impact? More than just the shift in roles and responsibilities, workflow disruptions, addition of some new departments and removal of some others … re-organization can be a profound stress trigger for the employees.
While reorganizations may seem like a strategic move on paper, the hidden costs of a re-org often extend far beyond just that:
Hidden Costs of Company Re-Organization on Employee’s Mental Health
Reorganizations including downsizing, upsizing and other re-org related shifts in corporations have become relatively common in today’s dynamic business landscape. Through the course of a re-org, employees are laid off, new employees are hired or moved around within the company to accommodate the objectives of a restructure such as higher profitability, better market reach or strategic adjustments such as the introduction of innovative initiatives among others.
1. Elevated Stress Levels
Restructuring often leads to higher levels of stress in employees due to a combination of psychological, emotional and practical factors. Employees may feel an increased amount of pressure to prove their worth or perform up to the new performance metrics. Adding to that the fact that most organizations take an average duration of 10 months from the introduction of reorg plans to the implementation … This extended uncertainty and loss of control leads to heightened stress levels. In corporations, where restructure happens on a more frequent basis, the repetitive redirection can result in change fatigue and significantly higher levels of stress.
2. Decline in Employee Morale
During a re-org, employees may feel that the promotion, demotion, hiring or lay-off processes are unfair. They are not sure how these processes may affect them of if the treatments would be preferential. The feeling of job insecurity combined with perceived favoritism leads to a lack of motivation and decline in employee morale.
3. Loss of Focus and Declined Productivity
esearch suggests that in about 60% of the cases, re-orgs can lead to significantly lower productivity in employees.
The anticipation of changes in procedural, strategic and business practices within the organization disrupts the employees’ focus and productivity. Even after the changes take effect, adjustment to the new culture, new leadership and new procedures does not happen overnight, especially if communication is poor and unclear.
4. Physical Health Problems
The stress and anxiety correlated with re-orgs can manifest physically, leading to sleep deprivation, headaches and digestive-related issues.
5. Sense of Loss of Social Support and Isolation
The employees who were working under familiar norms, rituals and team dynamics must now freeze and get ready to adjust to new processes as the company pivots to implement the new restructure strategies. This freeze state cause by reorganization can result in feeling dissociated and isolated, both of which can contribute to bouts of depression.
The following tips outline the strategic solutions that can effectively mitigate the disruptions and detrimental mental health impact on the employees:
What Strategies Can Support Employees as Corporations Go Through Re-Organization?
1. Make Communication Transparent to Minimize Uncertainty
Modeling open and honest communication is key for navigating the challenges of a re-org. Leadership should not only keep employees informed about the changes and their impact but also encourage teams to demonstrate clear communication and build mutual support systems. Answering questions to address the “Why”, “How” and “What” behind the re-organization process is crucial in minimizing uncertainty and enhancing trust within the corporation.
2. Introduce Performance Metrics
The intent of a re-organization is to drive companies close to greater success. Setting clear Key Performance Indicators (KPIs) has proven to be very effective in measuring the progress and success of any new initiative, including a re-org. An excellent KPI for corporations aiming to minimize anxiety and stress during re-orgs is “Employee Engagement and Wellness Score”. Keeping track of this KPI using regular surveys can help corporations assess employees’ stress levels, job satisfaction and overall well-being.
3. Use the Power of Re-Framing
Restructures can be challenging for leaders and teams. Re-framing is a powerful skill that can help see opportunities hidden in the challenges inherent to every re-org and organizational change. Re-framing is not about forcing a positive perspective on all negative situations. Rather, it is about re-routing the emotional response from one that increases stress and anxiety to one that is mood-boosting. For example, instead of focusing on job losses as a result of a re-org, leadership can highlight the opportunity for the employees to learn new skills and explore new roles.
4. Involve Employees in the Process
While reorganizations can be very busy times for leaders, it is crucial that leadership seeks employees’ input, feedback and perspective on the changes introduced. This involvement can include assigning certain employees to key roles and responsibilities, as well as providing them with the required training and development opportunities. Listen actively to employees’ opinions, concerns and suggestions. Involving the employees in the decision-making processes creates a sense of ownership and accountability, leading to improved overall mental wellbeing.
5. Offer Flexibility
Perhaps one of the best ways to show flexibility to minimize the stress impacts of a re-org is through practicing a phased transition. Instead of imposing immediate, drastic changes, allow employees to gradually adjust to new procedures, norms, assignments and culture. Introducing change using a phased approach takes the pressure off and gives the employees the time and space they need to adjust to a re-org, helping to reduce stress and anxiety.
Acknowledging that not all individuals have the same work style, productivity levels and communication approaches is critical during a change process. This mindset allows leaders to empower employees to manage and organize their workloads, allowing them the autonomy to determine what works best for them.
Leaders and managers must view change during re-org through a holistic lens that addresses the needs of both the organization and its individuals. By Adopting appropriate strategies, corporations can ensure that re-organizations are implemented in a way that minimizes stress, anxiety and burnout among the employees.