Every sector is experiencing the effects of record-breaking layoffs and growing attrition rates. But how many of those job losses are a strategic play from employers? It may be more than employees think.
Engineered attrition is a term used to describe the strategies and methods employed by companies to urge employees to quit in hard economic times so as to not resort to having to go through layoffs. And while it may sound like an appealing alternative for employers, it could have some potentially devastating long-term consequences.
"Organizations are creating an environment where they are aware it isn't conducive for people to work in or would want to work in," says Amrit Sandhar, founder of employee engagement consultancy The Engagement Coach. "The most obvious is forcing people back into the workplace five days a week when we know people want to work remotely. You're left to question: what's the motive?"
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The tech sector saw nearly 200,000 employee layoffs across more than 297 tech companies in 2022, including giants like Amazon, Microsoft and Google. And yet it's those same tech companies pushing return to work policies and reneging on previous promises to support remote work. As 68% of Americans prefer to be fully remote, according to career insights platform Zippia, this has created conflict that's
But why go through all of the trouble of changing workplace policies and disrupting several systems and departments in the hope of
"Rather than having to face making redundancies, it's cheaper to let people go off on their own once they've created a tough enough environment," he says. "The other one is that we know there are still many ineffective managers and it's the ineffective ones who don't provide enough guidance and promote the easiest way out, rather than having to face some of these challenges head on."
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But companies are putting themselves at risk for losing valuable employees they'd prefer to keep, and not just the ones being driven out the door. This is an
"The most talented people will be the first to go — the ones who enjoy the freedom, who don't need micromanaging or managing, the ones who love autonomy and know what they're doing and are experts in their field because they've got a lot of experience," Sandhar says. "They'll be the first to say 'I don't need this, I can go somewhere else.' And they will."
The employees who do leave are the least of employers' problems. In creating difficult work environments designed to push employees out, organizations are sacrificing the most critical key to retention and low turnover rates — employees' trust. And as soon as word spreads about how people have been treated across organizations, companies will begin to build a bad reputation quickly, which will often lead to
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"If we take this approach, just for the sake of the short term financial gain, we will pay a heavy price in terms of being able to deliver a strategy without talented people," Sandhar says. "You create this deep mistrust. Even if they reverse their policies back, people aren't going to want to come back, because if a company did it once, they could do it again."
As inconvenient or unappealing it may seem to stick to the more traditional layoff strategy — all while keeping them equitable and compassionate — it remains the best available option for employers looking to cut costs in troubling times, without hurting their future growth. Better yet, they could choose to be open with employees from the beginning, according to Sandhar, and give employees a two to three months
"Any organizational success is built on long term growth," he says. "How people are feeling at work and the environments we're creating is significant and it will have a massive impact on retention, on people's engagement and on their commitment."
