In today’s crumbling economy, reports of companies slashing payrolls by the thousands are business as usual. Even workers who are spared the ax may grapple with an unexpected consequence of mass layoffs: survivor’s guilt.

Professor of Management and Psychology Aaron Nurick is an expert on organizational behavior who has examined survivor’s guilt and other “human costs” of layoffs, for individuals and for organizations. “On the economic side, layoffs can help companies become more efficient and productive,” says the 30-year member of the Bentley faculty.  “But there is a psychological toll.”

Staff members who remain may express anxiety in a number of ways. “People are stressed and working more,” he explains. “They also may be more careful about what they say and do. Employees don’t want to be noticed because that makes them more vulnerable. It’s like animals in the wild — they’ll do whatever it takes to camouflage themselves and fit in. It’s an element of basic survival.”

Fear Factor
And here’s the paradox: The camouflage response can hinder prospects for a company’s successful turnaround.

“Creativity can be a cost of layoffs,” says Nurick, who holds a PhD in organizational psychology from the University of Tennessee–Knoxville. “Remaining employees are more careful and cautious, which means they don’t engage in behavior that could result in innovation. No one seems to want to fail.”

So, what action should a company take in facing prospective job losses? The question cuts across industries. March 2009 statistics from the U.S. Department of Labor put the national unemployment rate at 8.5 percent; some 5.1 million jobs have been lost since December 2007.

In Nurick’s view, helping managers develop “emotional intelligence” or “EQ” is an important part of addressing the impact of layoffs. The concept of EQ, popularized in 1995 by psychologist and science journalist Daniel Goleman, recognizes individual levels of aptitude in identifying and addressing emotions, both in oneself and in other people.

In the current corporate world, few professionals are trained to have difficult conversations or develop their EQ in other ways. The lack of preparation often leads managers to keep uncomfortable situations like layoffs as invisible as possible. But that is exactly the wrong approach, according to Nurick.

He urges managers to “adopt an open communication policy and keep people informed, describing the reasons behind the decision and allowing the surviving staff to more openly express their feelings – whether positive or not.

“In American culture, we have a very strong attachment to our work,” Nurick continues. “Our emotional well-being is very much tied to what we do; it’s part of our identity. Layoffs are a loss, and all losses have to be mourned in some way. Companies and managers need to allow people to experience their grief.”