In the ever-evolving talent trends landscape, “quiet cutting” has emerged as a way for employers to reduce headcount as an alternative to mass layoffs or reductions in force. Quiet cutting can show up in several ways in the workplace. This approach involves reassigning workers to unfavorable positions in an effort to encourage employees to leave voluntarily. In addition to reassigning employees, some employers are waiting for older employees to retire, shifting more responsibility to artificial intelligence and not filling open positions. Some organizations could be practicing this deliberately, while others may be mirroring this trend without realizing it.
Proponents of quiet cutting consider the approach to be saving an organization from paying severance, unemployment, health benefits and other company costs. While this strategy may seem discreet, it’s not without its challenges or risks, with the harm sometimes outweighing the benefits. This article explores the impact of quiet cutting and highlights common mistakes to avoid when using this tactic to reduce headcount or readjust employees.
The Impact of Quiet Cutting on Workplaces
A survey by manufacturing services firm Zetwerk found that nearly a quarter (24%) of surveyed companies admit they practice quiet cutting. Reassigned employees are frequently moved to less strategic and visible roles, call center jobs and positions with nontraditional hours. The Zetwerk survey also revealed that one-third of employees were subjected to quiet cutting, and nearly half of employees knew a co-worker who had been quietly cut. In response to seeing quiet cutting in the workplace, the top feeling respondents reported was betrayal. Some would prefer straightforward termination over quiet cutting.
Some organizations may pursue quiet cutting with the intention of preserving the company’s reputation or employer brand by avoiding the negative publicity associated with mass layoffs. The subtle approach could be angled to minimize immediate work disruption, allowing for a smoother transition. Other employers may engage in this strategy without deliberate planning.
On the other hand, there are strong cases for not employing quiet cutting, which are rooted in company culture, values and ethics. Consider the following disadvantages of quiet cutting:
- Negative company culture—Quiet cutting can negatively impact employee morale, affecting productivity and company culture. Employees feeling betrayed may be compelled to leave negative reviews about the company. Also, the discreet nature of quiet cutting may result in a lack of clarity, leading to increased uncertainty among employees still at the organization.
- Legal risks—Failing to comply with labor laws may expose the company to legal risks and reputational damage.
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While workers often understood the need for reductions in force during the COVID-19 pandemic, they are increasingly critical of today’s layoffs. As such, quiet cutting is emerging as an alternative to reductions in force.
5 Common Mistakes of Quiet Cutting
Despite the negative ramifications that may result from quiet cutting, it’s possible for employers to engage in this method tactfully and compliantly to reduce the risks. When employers reassign employees, shift responsibilities or choose not to fill positions, there is much to consider. If a company decides to push employees out of the organization, they should consider these five common mistakes:
1. Failing to communicate organizational changes transparently—Prioritize open communication to ensure employees understand the reasons behind the changes. Regular check-ins between managers and workers—complete with candid feedback—can help build trust.
2. Neglecting employee morale—Many organizations ignore the impact on employee morale when they make talent decisions. Instead, organizations should maintain a positive workplace culture to mitigate any adverse effects on morale. Performance improvement plans, or PIPs, can help address skill or behavioral issues early on. Skill development and training programs can also be beneficial.
3. Providing inadequate support systems—To demonstrate compassion, employers can offer support systems to affected employees, such as career transition assistance and counseling services. Employee assistance programs can also help support staff during uncertain or challenging times.
4. Failing to plan for the future—It’s critical to have a comprehensive plan for the post-transition phase. When reducing or changing headcount, employers should develop a clear vision and future roadmap to adapt to evolving industry landscapes.
5. Overlooking legal compliance—Ignoring legal compliance can lead to potential legal ramifications. Employers should ensure that talent strategies align with local labor regulations to protect both the organization and its employees.
Summary
Quiet cutting is an attempt by employers to push certain employees to quit rather than terminate them. This strategy is becoming increasingly common, but there are pitfalls to be aware of. Companies must approach talent strategies with transparency, empathy and a commitment to legal compliance. By avoiding the most common mistakes, organizations can navigate the delicate process of quiet cutting while preserving their reputation and fostering a positive workplace culture.
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This HR Insights is not intended to be exhaustive nor should any discussion or opinions be construed as professional advice. © 2024 Zywave, Inc. All rights reserved.
