Job insecurity is contagious: how can you ensure that the work climate is not affected?

Just a few weeks ago, the economic prospects for many companies were very bright. Unemployment was at a historical minimum, various industries showed a steady growth, and there was careful optimism among business leaders. Until the global outbreak of COVID-19. This global pandemic has an unexpected and unprecedented economic impact on business and according to macro economists, a recession is a real risk.

Clearly, also the world of work will be profoundly affected by the virus outbreak. Based on different scenarios for the impact of COVID-19 on global GDP growth, the international labour organization (ILO) developed two possible scenarios for how this crisis will impact employment. In the optimistic scenario, ILO expects an increase in unemployment of 5.3 million, whilst in the most pessimistic scenario this increase may go up to 24.7 million (the base level of employed people in high-income countries in 2019 was 188 million). And when we compare this to the global financial crisis of 2008-2009, there was an increase in unemployment by 22 million.

Although these statistics remain highly uncertain, it does seem that a rise in global unemployment cannot be avoided. Regardless of the scenario that will unfold and irrespective of the objective numbers, it is clear that many employees will at least subjectively worry about the continuity of their jobs. And if there is one thing that we know about job insecurity, it is that job insecurity is contagious and may affect the overall work climate in your organisation.

To maintain a positive work climate, even in the face of heightened insecurity, it is important that leaders focus on three elements:

1) Transparency and authenticity: don’t make promises you can’t keep

It takes years to build a reputation, but it takes 5 minutes – or in this case a few weeks – to ruin it. And research shows that a climate of job insecurity may lead to long lasting wounds when there is a lack of transparency and authenticity. In a context of rapidly evolving insecurity, transparency and authenticity may be easier said than done. Before the crisis you may have emphasised how the unique contribution of every employee matters. Now that we are a few weeks later, the financial reality urges you to put some or many of your employees on (temporary) unemployment. In times of uncertainty, it is important to exhibit realism and to not make promises you can’t keep. Rather, be honest and transparent about the fact that there is uncertainty, and that in taking action, you can only focus on the next step.

2) Prepare employees

Even though in the face of uncertainty, no one can predict what the future brings, as a leader you can prepare people for various scenarios, and openly communicate about the implications and consequences of each of these scenarios. You can even engage your team or entire organisation to think about the various scenarios that may unfold. By doing so, you not only mentally prepare employees for whatever scenario may arise, but you may also generate relevant and important input for developing an action plan for each scenario.

3) Focus on solidarity and collaboration

Just like it takes years to build a reputation, it also takes years to build a healthy and collaborative work climate. In times of crisis, as a leader you may feel tempted to take over control and exhibit a more directive approach to close yourself off from the human pain your decisions may be causing. Whilst it is of course important to stay in command, it is just as important to remain open to the human suffering that your decisions may cause, and to remain open for bottom-up input in your decision making. By emphasising and being a role model for collaboration and solidarity, you can mitigate the potentially damaging effects that heightened levels of perceived job insecurity will have on the climate in the organisation. Research shows that job insecurity hurts the work climate more when there was already a structure of competition rather than collaboration. This means that also reward systems that differentiate between work groups in your organisation, may awaken the dark side of an otherwise healthy winner’s mentality within the organisation.

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