News last week that the U.S. Postal Service is seeking to cut 120,000 jobs might not have rocked your world. Maybe you saw it as more of the same old drama around public sector employee relations, or perhaps just another sign that the economy is deeply troubled.
But the Postal Service’s controversial plan, in conjunction with the erosion of the U.S. safety net and recent data around employee attitudes, points to a key lesson for employers today. That lesson: ignore employees’ desire for economic security at your peril.
The Postal Service made headlines with its statement that it will be insolvent next month and that it plans to eliminate 220,000 jobs by 2015 for a workforce of 425,000. Claiming that only 100,000 of the job cuts can be achieved through attrition, the government agency asked Congress to eliminate the layoff protections in its collective bargaining agreements.
Immediately, the proposal was blasted by the American Postal Workers Union. I don’t know enough about the specifics of the contracts to gauge whether those layoff protections go too far, effectively handcuffing management. But strong feelings around job security aren’t surprising.
Despite some improvements to the U.S. social safety net made at the start of the Obama administration, the U.S. system for cushioning unemployment leaves much to be desired. America tied for 23rd place among 32 developed countries in a 2009 measure of safety net generosity during the initial phase of joblessness, according to the Organisation for Economic Co-operation and Development research group. The U.S. ranking improved to a tie for 14th place when considering benefits to the long-term unemployed.
Still, that U.S. net has been fraying. States including Michigan, Missouri, and Florida cut back their unemployment insurance programs in 2011, according to a report by the National Employment Law Project. And a government program that subsidized COBRA health insurance premiums for millions of laid-off employees is set to expire at the end of this month.
Such tears in the safety net, combined with the rise in long-term unemployment and the lingering trauma of the recession, has American workers craving economic constancy. In a 2010 study of U.S. employees by consulting firm Towers Watson & Co., respondents ranked “security and stability” as their top priority.
Companies can’t be expected to guarantee employment for life. But they can take steps to increase employees’ sense of job steadiness. These include clear communication about company strategy and how each worker fits in with the plan, a commitment to minimize layoffs—possibly through the use of alternatives such as furloughs—and improved career development. The last of these helps workers gain resiliency, so that even if they lose their job, they are better prepared to land their next gig.
Fail to take such measures, and you risk alienating your workforce and hurting your reputation. All the slashing and burning of jobs during the recession, for example, seems to have contributed to a steep drop in worker goodwill toward former employers. The percentage of departing employees who would not recommend their employer has jumped from 41 percent in 2006 to 77 percent in mid-2011, according to the Corporate Executive Board Co. research firm.
American employers also might want to do more to lobby for a stronger, smarter safety net. That’s something that would help workers feel less anxious on the job, whether or not they are postal carriers.
