Job insecurity has ripple effect on workplace productivity, safety

New York TimesMay 24, 2014 

The immediate impact of the recession – widespread buyouts and layoffs – may be fading, but the fear of losing a job hangs over workplaces like a cloud of worry.

“Perceived job insecurity,” as it is called, may be here to stay, and the latest studies show it has even more wide-ranging and serious effects on workers and companies than was once thought.

Most people know – and research has demonstrated – that just about nothing is worse than uncertainty, and the dread of being unemployed can actually be worse than the reality of being laid off, said Tinne Vander Elst, a postdoctoral researcher in organizational and personnel psychology at the University of Leuven in Belgium.

“When people know they will lose their job, they deal with it and their well-being increases,” she said. “The really difficult situation is when people are in an insecure position, because they feel powerless.”

And there are a lot of people in that position. A Gallup poll found that in August almost one-third of workers feared being laid off, compared with about half that number in August 2008.

But what are the concrete effects of all that worry?

“Research indicates that job insecurity reduces both physical and mental health, increases burnout, reduces job satisfaction and decreases work performance,” Vander Elst said.

Although some have theorized that a little insecurity isn’t a bad thing because people might work harder to keep their jobs, she said studies showed that “any amount of job insecurity isn’t good.

“If you’re anxious or depressed, it is difficult to be productive or creative,” she said.

Or safe. A study released in November, co-written by Tahira Probst, a professor of psychology at Washington State University, found that threats or the perceived threats of layoffs caused workers to pay less attention to safety and subsequently experience more injuries and accidents at work.

And just as troubling, she said, “employees are also more reluctant to report injuries when they are fearful of losing their jobs. So job insecurity is also related to accident underreporting.”

When people are anxious about losing their jobs, they might seem likely to seek support from company wellness programs and counseling. But they’re more reluctant to do so, said Wendy Boswell, a professor of management at Texas A&M University.

Her study, “I Cannot Afford to Have a Life: Employee Adaptation to Feelings of Job Insecurity,” is scheduled to be published in the winter edition of the journal Personnel Psychology. Boswell and her colleagues surveyed 655 employees at a large energy company. Their research found that employees who were more worried about losing their jobs or having their benefits or hours cut were also less likely to use any support programs than those who felt more secure.

This also included asking for flextime or leave.

The findings were surprising, she said, because the company had relatively few layoffs, and none in the division where the workers were surveyed. And “the company prided itself on being very supportive of balancing work and family.”

Home life affected

It appears that when a worker fears job loss, Boswell said, “the last thing you want your supervisor to think is that you’re not putting in 150 percent. You want to seem indispensable.”

Another finding, she said, is that the more you are worried about your job, the more you let work permeate your home life.

“You want people to know, ‘I’m a good worker bee,’ ” she said. But that can backfire. Allowing work to cross over more and more into personal life leads to increasing burnout and work-family conflict.

Mary, a registered dietitian who asked her real name not be used because she was worried about being let go from her job, knows well the toll of workplace uncertainty. She has been employed at her current job for two years but has no contract and receives no benefits.

“Any wrong look sets me thinking I’m going to be fired,” she said. “It’s really stressful. I have stomachaches, headaches, and I don’t sleep as well as I used to.”

Kathy Knudson, a San Francisco career counselor and therapist, sees a lot of people like Mary. The first thing to do, she said, is to make sure there is a real and imminent danger of losing your job.

“You need to look at what the odds are it’s going to happen and how to protect yourself,” she said. And even though it’s not easy, she added, everyone has to start thinking more like an independent contractor.

“There is no job security – it’s an oxymoron,” Knudson said. “Job security is maintaining cutting-edge skills and establishing a far-reaching network.”

Flexible rules

From all accounts, job insecurity is a bad thing and seems to be here to stay, but that doesn’t mean we ignore it. Understanding how it affects people and productivity can influence government and corporate policy.

Some Scandinavian and other European countries, for example, have introduced the concept of “flexicurity,” said Paul Glavin, an assistant professor of sociology at McMaster University in Ontario. Companies have flexible rules for hiring and firing, and the government provides strong financial safety nets and active job training for the unemployed.

On the company level, managers need to learn to communicate honestly, frequently and realistically, Vander Elst said, and the communication needs to address the real worries of the workers.

In other words, “if there are changes, how will this affect my job?” she said. “They also need to say what is known and what is not known. When employees don’t trust management, rumors will start, and then it is very hard to convince people they are not true.”

Firms should do this because it is better for workers, Glavin said, but it also is better for the bottom line.

“From a business perspective,” he said, “insecure workers are not happy workers and not productive workers.”

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