That’s according to a new study conducted by researchers at the University of British Columbia and published in the Academy of Management Journal, which tracked the fallout from a round of staffing cuts at a major, unnamed brand across 1,620 retail stores over 22 months starting in January of 2014. Each store employed an average of 93.6 workers and researchers found on average at each store, 2.2 staff chose to quit one year after – the majority in the first six months – a company-wide layoff.
“When high performers quit their jobs, it takes others about three months to make up their minds and decide their next step,” Ms. Sajjadiani said. “For layoffs, within one month it’s happening, and it shows that people are scared; it sends a signal that this job is not safe anymore.” According to research published by Mr. Trevor in 2008, a 2-per-cent cut to staffing levels results in a 36-per-cent increase in quit rates, while a 1-per-cent cut increases voluntary turnover by 31 per cent. He adds that the correlation between layoffs and voluntary resignations is largely determined by the actions of the employer.
He said there is currently no data to suggest how long this effect on voluntary resignations can last, but other research on financial performance has found organizations can be negatively affected by layoffs for years. Employers can lessen those negative side effects by pursuing other cost-cutting measures – such as reducing non-personnel costs, offering furloughs and requesting voluntary resignation – before engaging in layoffs.
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