Numerous employees who manage to weather company downsizing often feel inclined to seek opportunities elsewhere – and frequently follow through.

Amidst the backdrop of a turbulent economic landscape marked by extensive workforce reductions and corporate streamlining, a notable portion of employees are holding steadfast to their current positions. Paradoxically, this scenario might set off an unexpected chain reaction, causing some of the surviving staff members to proactively seek new employment opportunities and ultimately make the leap.

An investigation unveiled in the January 2023 issue of the Academy of Management Journal delves into this phenomenon. The study, which spanned 22 months and scrutinized 1,620 retail stores through a distinctive analytical framework, aimed to forecast the outflow of human capital. Results revealed a compelling pattern – after company-wide layoffs, voluntary departures were tenfold more frequent than initially anticipated. While resignations surged across the employee spectrum post-layoffs, a discernible trend emerged among high-achieving personnel. Over the six months following the announcement of job cuts, voluntary departures among this group escalated from approximately 1.5% to 2%, reflecting an impressive 75% increase.

This pattern seems to echo across various sectors, as experts note similar dynamics in play. Surviving a downsizing initiative, many individuals grapple with the psychological aftermath of widespread layoffs, leading to a wavering of confidence and trust. Often, a cocktail of diminishing faith in their employers, inadequate resource allocation, and industry instability prompts workers to make the decision to move on, preempting potential dismissal.

Sima Sajjadiani, an assistant professor at the University of British Columbia’s Sauder School of Business in Vancouver, elucidates this trend further. “We observe a proactive trend – people don’t wait for job losses to materialize before exploring other options; turnover surges right after the announcement of layoffs,” she points out. “The signal seems to be, ‘I need to act swiftly; my time here is limited.'”

In many ways, turnover can be infectious. Sajjadiani explains that one resignation can trigger a cascade of similar actions, as colleagues often mimic each other’s decisions. Nevertheless, in contrast to voluntary departures, layoffs imbue a heightened sense of urgency.

When a wave of job cuts sweeps through an organization, unaffected employees might harbor concerns that their roles are next on the chopping block. Sajjadiani encapsulates this sentiment: “When redundancies are announced, the underlying message is that the workplace is no longer a secure haven,” she asserts. “As employees witness the news or witness their peers packing up and departing, a sense of crisis takes hold – it becomes an emotional ordeal.”

Frequently, the occurrence of layoffs has a profound impact on employees’ allegiance and sense of purpose within an organization. “Job security serves as a pivotal factor motivating individuals to go the extra mile for their employers,” asserts Sajjadiani. “Ultimately, employment embodies a transactional pact between the employer and employee. If one party fails to uphold their commitment, the foundation crumbles.”

Indeed, the specter of layoffs “can cast seeds of uncertainty among employees,” according to Jim Link, the Chief Human Resources Officer at the Society for Human Resource Management (SHRM), headquartered in Virginia, USA.

Furthermore, the loss of colleagues, friends, and cherished working relationships in one sweeping stroke can intensify these emotions. “This aligns with the concept of job embeddedness, where collaborations form an invisible lattice of social connections among coworkers,” Sajjadiani adds. “When this intricate web unravels due to layoffs, it engenders a profound psychological impact.”

Consequently, the aftermath of job cuts can leave the remaining workforce grappling with sentiments of regret, bereavement, and ambiguity. Moreover, practical challenges arise as employees must contend with the stress of accomplishing more with fewer resources, Link emphasizes. “They may also grapple with concerns of inadequate resourcing, coupled with the weight of expanded job duties post-layoffs: as friends and colleagues depart, the workload remains.”

As colleagues face redundancy, one key factor propelling top-performing workers toward new horizons, as noted by Sajjadiani, is that “departmental downsizing often translates to the departure of high achievers and managers. This sends a signal to exceptional colleagues that they should explore fresh prospects and secure alternative employment” – especially given their potentially brighter prospects in the labor market.

This dynamic is echoed in voluntary resignations, she adds. “Yet, in comparison to voluntary exits, the dynamics of layoffs heighten the urgency. The thought process becomes, ‘I might be the next to go, I must safeguard myself.'”

Of course, not every employee who contemplates departing in the wake of layoffs can do so immediately. Nevertheless, the impulse to seek new opportunities remains strong for many. This implies that they will vigilantly scan the horizon for potential openings – even if their ability to transition may not be as swift as desired, particularly in industries undergoing widespread workforce reductions across numerous companies.

“Entertaining the idea of departure [after layoffs] becomes almost inevitable – the actual execution, however, hinges entirely on the existence of prospects within the job market. They’ll certainly be watchful,” asserts Sajjadiani.