Redundancy has a huge impact on mental wellbeing, with the stress and uncertainty of job loss often leading to depression, anxiety and other psychological issues. 

However, there are practical steps that an employer can take to support mental wellbeing when the need for redundancies arises.

The people being made redundant

For the people being made redundant the impact can be devastating. 

Being told that you’re no longer required can trigger beliefs of being inadequate or disposable – even if this isn’t how you’re viewed. 

Being treated with respect and compassion can help contain any feelings to a transient unpleasant experience rather than something lasting that shatters self-worth. 

Being told that you’re no longer required can trigger beliefs of being inadequate

Redundancy and mental wellbeing

Redundancy impacts mental wellbeing in the following ways.

1. Loss of identity: Losing a job can lead to a sense of disconnection from the larger community. This can cause feelings of alienation, confusion, and loss of purpose
2. Loss of self-esteem: Redundancy can trigger negative emotions like guilt, shame, and embarrassment, accompanied by a significant drop in self-esteem. People may (inaccurately) see themselves as a failure or worthless and this self-blame can have a profound impact on their mental health
3. Stress and anxiety: Redundancy is often accompanied by significant worry and stress about finding another job, financial concerns and feeling uncertain about the future that can become pervasive and difficult to manage
4. Depression: The emotional impact of redundancy can be overwhelming and severely affect an individual’s day-to-day functioning, making it difficult for them to face life and engage in activities, including finding a new job or connecting with friends or family.

Losing a job can lead to a sense of disconnection from the larger community

The people who remain

It’s well documented that redundancies also impact on those who are left behind. 

Some ways that redundancy impacts employees who remain are: 

1. Increased workload: When employees who remain are given additional responsibilities and workload, this can lead to increased stress, burnout and decrease in job satisfaction and productivity. To mitigate this, ensure that workloads are managed fairly and that employees have the resources and support they need
2. Reduced morale: The loss of colleagues can have a negative impact on the morale of employees who remain. Those who are left behind can be left with feelings of anger or guilt and may go through a period of mourning, taking time to readjust to the changes. Address this by promoting a workplace culture where people can safely express how they’re feeling, and offering opportunities for employees to connect and regroup
3. Decreased trust: The redundancy process can damage trust, particularly if it is perceived as unfair or poorly managed. Employers should ensure that the redundancy process is managed transparently, fairly, and in line with legal requirements to minimise any impact here.
4. Increased stress: Uncertainty and anxiety surrounding redundancy can increase stress levels among employees who remain. Re-establishing psychological safety is crucial and employers can support employees by providing access to support services, such as therapy

Here are six ways to support mental wellbeing for employees affected by redundancy:

Redundancy is often accompanied by significant worry and stress about finding another job

1. Open communication

Encouraging open communication can help to reduce anxiety and uncertainty. 

It’s important to provide employees with clear information about the redundancy process, such as the reasons for the redundancy, the selection criteria, and the timeline. 

Lisa Shuster, Chief People Officer at iHire said: “If the layoff is for budget reasons, you should already have been communicating to your workforce that financial times are tough and downsizing is on the table“.

The loss of colleagues can have a negative impact on the morale of employees who remain

2. Support services

With the stress and uncertainty of job loss often leading to depression, anxiety and other psychological issues it’s essential to provide the right quality of accessible mental health support. 

HR and line managers need the right professional experts to refer employees to – there’s over 20 types of therapies they might need vs basic counselling, so check your wellbeing support.

It’s important to provide employees with clear information about the redundancy process

3. Outplacement support

Providing outplacement support can help employees to transition to new employment. This may include career coaching, resume writing workshops, and job search support. 

This type of support can help employees to regain a sense of control and purpose and assist them in moving forward.

It’s essential to provide the right quality of accessible mental health support

4. Manage the process fairly and ethically

Ensuring that the redundancy process is managed fairly, transparently, and in line with legal requirements is crucial in supporting wellbeing. 

This includes following a fair selection criteria, conducting consultations with employees, and providing an appeals process. 

Feeling respected and fairly treated can help people leave with minimal damage to their self-esteem, helping them to move on more easily. 

Empathy matters, as we have seen to the extreme of when this is completely missing from the process such as the 900 people let go over Zoom at Better.com. 

Feeling respected and fairly treated can help people leave with minimal damage to their self-esteem

5. Rituals and recognition

Allowing emotions to be expressed can help the experience feel more human and less shame-laden. 

Where possible, leaving parties or rituals can help transitions and offer a chance to say goodbyes. 

Often people will feel that it’s personal when it isn’t. Acknowledging their qualities and contributions in some way can help to offset the blow to self-esteem they might be experiencing. 

Often people will feel that it’s personal when it isn’t

6. Aftercare

Providing aftercare support to employees who have been made redundant can help to reduce the long-term impact of redundancy on their wellbeing. 

This may include check-ins with employees to assess their mental and emotional wellbeing, and providing support and resources to assist them in finding new employment. 

Aftercare can help employees to feel valued and supported and can demonstrate the employer’s commitment to their wellbeing.

Allowing emotions to be expressed can help the experience feel more human and less shame-laden

It’s time to step up

The impact of redundancy on mental health is significant and can have long lasting effects. 

More than ever, it’s essential for employers to really step up and provide a duty of care to all people impacted and take into consideration the psychological support needed in order to protect the mental wellbeing of all involved. 

If you enjoyed this, read: Five golden rules for workplace wellbeing