There are many misconceptions regarding the psychological effects of Redundancy. The most common thing we hear is about how awful, destructive and painful this experience is.  I know this is only a part of the story.  As a function of my work, I have been at ground level zero in a number of organizations at the time when announcements are being made concerning possible closure and/or redundancy.  I have also had the privilege of designing strategies to help both the organization and the workers to deal with the subsequent issues related to the redundancy. 

For most managers, redundancy is probably the most stressful event that they will have to contend with.  One manager that I spoke to, explained that he had been in an organization for about two (2) years. The company was then sold and he had to prepare over four hundred (400) packages for members of the workforce.  At the end of this, he had to draft his own letter, take it to the chairman for it to be signed and then leave the premises.  When he met the rest of the former employees outside, they were very surprised to see him because they thought that with the coolness that he had handled the process that he was ‘safe’, the reality was that he was not.  Most managers agonize over making the decisions when cuts have to be made. 

Who Really Feels The Effects?
I often have to tell companies that at the end of the redundancy operation, the persons who will have the least problems are those whose posts have been made redundant.  They will move on, and in most instances, will have better lives.  The reality is that most workers are dissatisfied with their jobs.  But they are afraid to leave because they fear the unknown, even if there is the promise of better things. The result is that they stay, grin and bear it.  When redundancy options become available, a range of emotions come into play – fear, hope, sadness, joy. For some, it means loss of friends, status, and uncertainty. For others, it means looking forward to the chance to move on and to find new experiences.  Most workers find that even if they did not look forward to the exercise, once they are forced to move on, they are able to improve their situations within two (2) years.  The persons who often have real problems after redundancies are the workers who are left behind.  We have had the opportunity to do research in this area and now share the findings from two industries with you. 

The Realties At Ground Zero
Study One – Insurance Sector
In 2004, I worked with Insurance Industry workers who were survivors of a redundancy exercise.  The survey asked them to indicate which one of four options they were experiencing.

• 63% were Thankful that they Still Had A Job
• 23% Wished that they Had Been Made Redundant, Paid Off, and Hired Back in a Contract Position
• 13% Wished they Had Been Made Redundant, Paid Off and had a Chance to Move On with their lives
• 1% was Fearful of Future Redundancies

What this tells us is that 36% wished that they had been made redundant.  This sentiment results in serious adjustment issues which most companies are not prepared to handle. 

Study Two – Banking Sector
In 2005, we surveyed employees who were the survivors of a redundancy exercise in the Banking sector.  Given the same options, the results indicated that 54% were Thankful that they Still Had A Job.  However, 17% Wished that they Had Been Made Redundant, Paid Off, but Hired Back in a Contract Position. 13% Wished that they Had Been Made Redundant, Paid Off and Moved On with their lives, the same figure has we found last year with the insurance employees.  However, in this case, 15% were Fearful of Future Redundancies. 

What Is The Result?

What is evident from these figures is that a lot of effort is required to deal with workers post-redundancy because of those who wished that they had moved on but who are still there. Those who are fearful of future redundancies will also be working well below their potential because of the inhibitions inherent in their new situation. More often than not, organizations do not achieve the projected benefits of redundancies because of the lack of effort directed to rebuilding the energies and refocusing the workforce after the redundancies. This evidence comes from data gathered from international sources. This is also true in the Jamaican situation. Based on the amount of energies and resources used up for the redundancy exercise, most managers have very little insight, creativity and energy left for the rebuilding process which must begin on the first day after the redundancy.  What is the result? A major dip in energies and more likely than not another redundancy exercise within two (2) years.