Layoffs lower a business’ Glassdoor ratings. The statement is neither new nor surprising, but with the current rise in layoffs across industries, it is an important phenomenon to acknowledge. A new report from Glassdoor found that layoffs push Glassdoor scores lower after employees who are forced out the door take to the platform to explain their experience with the organization. To put matters into more concrete numbers, the report found that Glassdoor ratings cause a loss of 0.13 stars out of 5.
The data showed that this drop in review was not just among employees who were affected by the layoffs, but even those who managed to keep their jobs. Those who beat layoffs also showed a 0.16-star drop in their reviews of the organization. The employer’s public brand is not always an HR responsibility, but they do have a role to play in keeping employees satisfied and redirecting the narrative both during and after an employee’s time with an organization.
We know that layoffs lower a business’ Glassdoor ratings, but there is more that needs to be done to address the employee frustrations that emerge. (image: Freepik)
Layoffs Lower Glassdoor Reviews: What Does This Say About the Employer Brand?
Layoffs are typically unpleasant for everyone involved, with the exception of investors and shareholders. Organizations that resort to layoffs typically do so to cut down on business expenses as job cuts allow them to redirect the resources saved from their wages into rehiring or other, more profitable, wings of the business. Other than the one-time bulk expense of paying out severance, layoffs often help organizations conserve and reinvest resources. Employees who are laid off are rarely happy campers because, for them, it means losing out on stability on multiple levels.
Glassdoor, an employer review platform, has grown over the years to become a mechanism for employees to share their experiences, allowing job seekers to better understand what to expect from the form. Now, data confirms that layoffs lower Glassdoor ratings by 0.13 stars among employees who are affected, and a 0.16-star drop among those who remain.
The likelihood of company reviews falling after layoffs is significantly higher for the highest-rated companies, which see the biggest drop in their ratings in the first six months, approximately 0.22 stars, compared to those with middling or poor ratings before the layoffs.
The Layoffs Damage to Glassdoor Scores Can Require Almost Three Years to Recover
The Glassdoor ratings take years to build into something respectable after repeated dealings with employees paint the full picture of working at the organization. In Glassdoor’s estimate, the layoff rating impact only begins to recover in the second year, and only goes back to pre-layoff numbers after 32 months.
This fall may not matter to all employers evenly, but many job seekers do take the public opinions and reviews into account when looking for work. This is particularly relevant for top earners and in-demand talent, who often have multiple job offers to shuffle through before settling on the one that works best for them.
Frequency Matters: Overdoing Layoffs Has Obvious Consequences
In the past, layoffs were rarer occurrences that occurred once every few years to allow the business to realign its resources and eliminate redundant roles. Now, layoffs are occurring on a monthly basis, with businesses regularly leaving the option on the table while debating the best approach forward.
With the increase in frequency, Glassdoor reviews take a similar hit, dropping twice as far for the highest-rated companies. Glassdoor also found that the ratings tend to slip the most among key talent, managers, and new hires. This is hardly a good look for businesses that are trying to build their brand, particularly those that are hoping to hire again for AI-literate roles.
Do Layoffs Really Affect Employer Brand and Reputation?
It can be easy enough to brush off the layoffs’ rating impact as collateral for the success that the business is in pursuit of. After all, as long as customers and clients use the products and services the organization has to offer, does employee perception really matter? It should. Considering how the majority of individuals are chronically online, many turn to Glassdoor or other platforms like Quora and Reddit to ask about employers when they apply for jobs.
Negative discussions around the company and its work culture are often enough to dissuade job seekers from proceeding with their application with the organization. Bystanders who witness these discussions also gain a more negative perspective of the organization, turning to alternate services and platforms to show their solidarity with the unhappy employees.
The Glassdoor ratings decline is not just a matter of perspective, either. The report stated that these companies lost “$20.8 billion in the first year after their layoffs due to post-layoff disengagement and increased voluntary turnover.” Following mass job cuts, companies can experience a 26% increase in active disengagement and a 40% rise in the number of current employees looking for alternate employment. These shifts are just as concerning as the fall in ratings.
Where HR Can Help Ensure That Layoffs Do Minimal Damage
Some layoffs are inevitable, while others can be scaled down at the discretion of the executives who run the organization. Avoiding massive reorganization efforts that eliminate employees may be the ideal solution for many. But if this is not an option, managing employee expectations and their on-the-job experience can go a long way in ensuring that a flood of negative reviews after layoffs doesn’t lower the Glassdoor ratings or the public image of the organization.
A majority of the work here doesn’t happen during layoffs but in the time that comes before, perfecting the experience that employees have with the organization.
Some Ways in Which HR Teams Can Contribute Include:
- Moderating the company culture to ensure it is inclusive and hospitable for all employees
- Building engagement and collaboration among workers, and allowing each employee to feel appreciated
- Ensuring employee benefits and wages align with their expectations
- Fostering a sense of unity and shared purpose among employees, ensuring everyone is heard
- Communicating with transparency throughout the employee’s time at the organization
- Helping employees prepare for incoming layoffs and setting clear expectations of what’s to come
- Supporting employees during layoffs to ensure they have everything they need during the transition
- Providing a reasonable severance package and employee benefits for additional months
- Conducting exit interviews to ensure that employee grievances are heard and addressed
- Aiding employees with job seeking and placement opportunities
- Creating a stable environment for employees who are left at the organization
- Addressing employee concerns post-layoffs and providing them with resources to resettle into the “new normal” at work
In a post-layoff setting, things that employees might typically stay quiet about often bubble to the surface as their frustrations lead to outbursts. Listening to and addressing these grievances is where HR can step up to ensure that they are channeled into productive outlets and used to rebuild the organization into a version that outpaces its former glory. Dismissing employee sentiments is never a good idea, particularly during times of such significant change.
Do you think employers should take the Glassdoor ratings decline post-layoffs more seriously? Share your thoughts with us. Subscribe to The HR Digest for more insights on workplace trends, layoffs, and what to expect with the advent of AI.