The trend of attributing layoffs to over-hiring is on the rise, exacerbating concerns among employees, according to a recent report by job site Glassdoor. Let’s delve into the implications of this phenomenon and its effect on workforce morale
CREDIT: This is an edited version of an article that originally appeared on Forbes
Glassdoor’s latest findings reveal a 24% increase in employee reviews mentioning over-hiring since last March, with a significant surge compared to 2022. Daniel Zhao, Glassdoor’s lead economist, notes that employees are becoming more attuned to this narrative propagated by employers.
Moreover, this discourse is dampening employee confidence, particularly among entry-level workers. Despite a slight recovery in business outlook reviews, employee confidence remains substantially lower than its peak in July 2022.
Impact on morale and productivity
When companies use over-hiring as the rationale for layoffs, it fosters demoralisation among employees who remain. This often leads to a cascade of doubt regarding management decisions, resulting in decreased productivity and an uptick in job-seeking among staff. Moreover, framing layoffs as a consequence of over-hiring rather than reduced demand casts a shadow on management’s forecasting capabilities, further eroding trust and confidence among employees.
Employee confidence trends
Glassdoor’s analysis highlights declining confidence in sectors such as human resources, media, and telecommunications, attributed to layoffs and over-hiring claims. Conversely, industries offering stability, like government, public administration, healthcare, and education, have maintained higher employee confidence levels.
In conclusion, the prevalence of layoffs attributed to over-hiring underscores the importance of transparent communication and strategic workforce planning. As job security becomes paramount for employees, organisations must navigate layoffs with sensitivity to maintain trust and morale within their workforce.
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