92% of employers expect more layoffs in 2024

In 2023, 96% of all business organizations took some kind of downsizing action, according to data from Randstad RiseSmart. But even with those cuts, the workforce isn't out of the woods just yet.  

As we head to 2024, 92% of employers are expecting additional headcount cuts, according to the talent solution company's 2023 Global Severance research report. And most organizations, the survey found, are not prepared to help their workforces manage those cuts. 

"Post-COVID things have continued to shift and change," says Lindsay Witcher, senior vice president of Randstad RiseSmart. "Many companies over-hired after the pandemic when the economy had really softened, and now they're sort of left in this challenging position of needing to make some changes to their operating expenses which often comes in the form of layoffs." 

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A study from the American Psychological Association finds that being laid off  is one of the most stressful life experiences — more stressful than divorce or the death of a close friend, even. In Edelman's 2022 Trust Barometer, 85% of respondents rated job loss as their top concern. Eighty percent of HR professionals rate the way their company handles downsizing as excellent or very good, according to Randstad's survey, and 55% even believe that it will have a positive impact on how they retain employees. Yet, only a quarter of organizations in the United States currently offer severance packages to all exiting employees, the study shows.

"Every HR leader is talking about being more equitable in their employee experience, and how you treat people when they're leaving is just as important as how you treat people when they're coming into the organization," Witcher says. "It's a business imperative to offer some sort of severance and career transition benefits, because if you're a leader there's an ethical responsibility to do right by your employees." 

Of the companies that do offer some kind of severance package, only 28% of entry level employees are included in the offering, which is especially poignant when the likelihood of getting laid off is 62% for recent hires compared to 20% for more veteran employees, according to data from BambooHR. 

On a positive note, 55% of employer respondents have made changes to their severance packages in the past three years, and 33% of those who haven't made changes say upgrades are in progress. These changes include adding benefits like paying out bonuses for previously eligible employees, health benefits continuance, cash payouts, outplacement services, as well as retraining for other roles within the organization.  

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"The most advanced organizations are really getting ahead from a workforce planning perspective and forecasting the future needs of the business," Witcher says. "Let employees feel that you're investing in their career and giving them the opportunity to have many careers within the company."

In order to accomplish this, companies will have to first revise their current severance policies and identify where it is being restrictive and where they can expand their coverage and prioritize employee retention. If layoffs remain the only option, Witcher urges employers to revise their communication strategy to make the process of being let go as supportive and inclusive as possible. 

"When people have a good experience leaving your organization, they remain brand ambassadors, your customers and consumers," Witcher says. "Too many companies are taking the easy way out [when] there are so many options to consider if you want to improve."